Hart Labs, Inc. provides mad cow disease testing for both stateand federal governmental agricultural agencies. Because thecompanyâs customers are governmental agencies, prices are strictlyregulated. Therefore, Hart Labs must constantly monitor and controlits testing costs. Shown below are the standard costs for a typicaltest.
Direct materials (2 test tubes @ $1.90 per tube) $3.80
Direct labor (1 hour @ $30 per hour) 30.00
Variable overhead (1 hour @ $7.00 per hour) 7.00
Fixed overhead (1 hour @ $12.00 per hour) 12.00
Total standard cost per test $52.80
The lab does not maintain an inventory of test tubes. As aresult, the tubes purchased each month are used that month. Actualactivity for the month of November 2017, when 1,100 tests wereconducted, resulted in the following:
Direct materials (2,222 test tubes) $3,933
Direct labor (1,155 hours) 33,495
Variable overhead 7,106
Fixed overhead 13,101
Monthly budgeted fixed overhead is $17,400.
Revenues for the month were $73,700, and selling andadministrative expenses were $4,500.
Compute the price and quantity variances for direct materialsand direct labor. (Round answers to 0 decimal places, e.g.5,275.)
Materials price variance $
Materials quantity variance $
Labor price variance $
Labor quantity variance $
Compute the total overhead variance.
Total Overhead variance $
Prepare an income statement for management.
HART LABS, INC. Income Statement $ $ $
Hart Labs, Inc. provides mad cow disease testing for both stateand federal governmental agricultural agencies. Because thecompanyâs customers are governmental agencies, prices are strictlyregulated. Therefore, Hart Labs must constantly monitor and controlits testing costs. Shown below are the standard costs for a typicaltest.
Direct materials (2 test tubes @ $1.90 per tube) $3.80
Direct labor (1 hour @ $30 per hour) 30.00
Variable overhead (1 hour @ $7.00 per hour) 7.00
Fixed overhead (1 hour @ $12.00 per hour) 12.00
Total standard cost per test $52.80
The lab does not maintain an inventory of test tubes. As aresult, the tubes purchased each month are used that month. Actualactivity for the month of November 2017, when 1,100 tests wereconducted, resulted in the following:
Direct materials (2,222 test tubes) $3,933
Direct labor (1,155 hours) 33,495
Variable overhead 7,106
Fixed overhead 13,101
Monthly budgeted fixed overhead is $17,400.
Revenues for the month were $73,700, and selling andadministrative expenses were $4,500.
Compute the price and quantity variances for direct materialsand direct labor. (Round answers to 0 decimal places, e.g.5,275.)
Materials price variance $
Materials quantity variance $
Labor price variance $
Labor quantity variance $
Compute the total overhead variance.
Total Overhead variance $
Prepare an income statement for management.
HART LABS, INC. Income Statement $ $ $
Related questions
Problem 11-5A (Part Level Submission)
Prepare an income statement for management.
Hart Labs, Inc. provides mad cow disease testing for both state and federal governmental agricultural agencies. Because the companyâs customers are governmental agencies, prices are strictly regulated. Therefore, Hart Labs must constantly monitor and control its testing costs. Shown below are the standard costs for a typical test.
| Direct materials (2 test tubes @ $1.90 per tube) | $3.80 | |
| Direct labor (1 hour @ $31 per hour) | 31.00 | |
| Variable overhead (1 hour @ $6.00 per hour) | 6.00 | |
| Fixed overhead (1 hour @ $12.00 per hour) | 12.00 | |
| Total standard cost per test | $52.80 |
The lab does not maintain an inventory of test tubes. As a result, the tubes purchased each month are used that month. Actual activity for the month of November 2017, when 900 tests were conducted, resulted in the following:
| Direct materials (1,836 test tubes) | $3,140 | |
| Direct labor (945 hours) | 27,405 | |
| Variable overhead | 4,860 | |
| Fixed overhead | 10,512 |
Monthly budgeted fixed overhead is $16,080. Revenues for the month were $59,400, and selling and administrative expenses were $4,100.
