Compute variances/Hemley Labs, Inc. provides mad cow disease testing for both state and federal governmentalagricultural agencies. Because the company's customers are governmental agencies, prices arestrictly regulated. Therefore, Hemley Labs must constantly monitor and control its testing costs.Shown below are the standard costs for a typical test.Direct materials (2 test tubes @ $1.46 per tube)$ 2.92Direct labor (1 hour @ $24 per hour)24.00Variable overhead (1 hour @ $6 per hour)6.00Fixed overhead (1 hour @ $10 per hour)Total standard cost per test10.00$42.92The lab does not maintain an inventory of test tubes. As a result, the tubes purchased each monthare used that month. Actual activity for the month of November 2017, when 1,475 tests wereconducted, resulted in the following.Direct materials (3,050 test tubes)$ 4,270Direct labor (1,550 hours)35,650Variable overhead7,400Fixed overhead15,000Monthly budgeted fixed overhead is $14,000. Revenues for the month were $75,000, and sellingand administrative expenses were $5,000.Instructions(a) Compute the price and quantity variances for direct materials and direct labor.(b) Compute the total overhead variance.

Calculate the material price variance: Working note: 1) Calculate the actual price: Calculate the…

Answered: Compute variances/ Hemley Labs, Inc.…

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter8: Standard Costs And Variances

Section: Chapter Questions

Problem 11PB: Use the following standard cost card for 1 gallon of ice cream to answer the questions. Actual...

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Compute variances, prepare an income statement, and explain unfavorable variances. Hemley Labs, Inc. provides mad cow disease testing for both state and federal governmental agricultural agencies. Because the company's customers are governmental agencies, prices are strictly regulated. Therefore, Hemley Labs must constantly monitor and control its testing costs. Shown below are the standard costs for a typical test. Direct materials (2 test tubes @ $1.46 per tube) Direct labor (1 hour @ $24 per hour) Variable overhead (1 hour @ $6 per hour) Fixed overhead (1 hour @ $10 per hour) $ 2.92 24.00 6.00 10.00 Total standard cost per test $42.92 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 1,475 tests were conducted, resulted in the following. Direct materials (3,050 test tubes) $ 4,270 Direct labor (1,550 hours) 35,650 Variable overhead 7,400 Fixed overhead 15,000…
Use the following standard cost card for 1 gallon of ice cream to answer the questions. Actual direct costs incurred to make 50 gallons of ice cream: 275 quarts of cream at $1.05 per quart 832 ounces of sugar at $0.075 per ounce 165 minutes of labor at $37 per hour All materials used were bought during the current period. A. Compute the material and labor variances. B. comment on the results and possible causes of the variances.
Overhead variances, ethics. Carpenter Company uses standard costing. The company has a manufacturing plant in Georgia. Standard labor-hours per unit are 0.50, and the variable overhead rate for the Georgia plant is $3.50 per direct labor-hour. Fixed overhead for the Georgia plant is budgeted at $1,800,000 for the year. Firm management has always used variance analysis as a performance measure for the plant. Tom Saban has just been hired as a new controller for Carpenter Company. Tom is good friends with the Georgia plant manager and wants him to get a favorable review. Tom decides to underestimate production, and budgets annual output of 1,200,000 units. His explanation for this is that the economy is slowing and sales are likely to decrease. At the end of the year, the plant reported the following actual results: output of 1,500,000 using 760,000 labor-hours in total, at a cost of $2,700,000 in variable overhead and $1,850,000 in fixed overhead.
Cost Assignment and JIT Bunker Company produces two types of glucose monitors (basic and advanced). Both pass through two producing departments: Fabrication and Assembly. Bunker also has an Inspection Department that is responsible for testing monitors to ensure that they perform within prespecified tolerance ranges (a sampling procedure is used). Budgeted data for the three departments are as follows: Inspection Fabrication Assembly Overhead $320,000 $480,000 $136,000 Number of tests — 20,000 60,000 Direct labor hours — 48,000 24,000 In the Fabrication Department, the basic model requires 1.1 hour(s) of direct labor and the advanced model requires 2.2 hour(s). In the Assembly Department, the basic model requires 1.3 hour(s) of direct labor and the advanced model requires 2.45 hours. There are 30,000 basic units produced and 16,000 advanced units. Immediately after preparing the budgeted data, a consultant suggests that two manufacturing cells be created:…
Techno Laboratories evaluates the reaction of materials to extreme increases in temperature. Much of the company's early growth was attributable to government contracts, but recent growth has come from expansion into commercial markets. After analyzing the company data, he has divided operating costs into the following three cost pools: Read the requirements5. Requirement 1. Find the single rate for operating costs based on test-hours and the hourly billing rate for HTT and ACT. (Round your answers to the nearest cent.) The single rate for operating costs based on test-hours is per testing hour. The hourly billing rate for HTT and ACT is . Requirement 2. Find the three activity-based rates for operating costs. (Round rates to the nearest cent.) First select the formula, then compute the rate for each of the three activities. (1) ÷ (2) = Rate Labor and supervision ÷…
The following data apply to the provision of psychological testing services: Sales price per unit (1 unit = 1 test plus feedback to client) Fixed costs (per month): Selling and administration Production overhead (e.g., rent of testing facilities) Variable costs (per test): Labor for oversight and feedback Selling and administration (e.g., scheduling and billing) Number of tests per month Outsourced test analysis Materials used in testing. Production overhead a. Variable production cost per unit. b. Variable cost per unit. c. Full cost per unit. d. Full absorption cost per unit. Prime cost per unit. Conversion cost per unit. Contribution margin per unit. Gross margin per unit. e. 1. 9 h. 320 16,000 15,000 Required: Calculate the amount for each of the following (one unit one test) if the number of tests is 2,000 per month. Also calculate if the number of tests decreases to 1,250 per month. (Do not round intermediate calculations. Round your final answers to the nearest whole dollar.)…
Use the following standard cost card for 1 gallon of ice cream to answer the questions. Actual direct costs incurred to make 50 gallons of ice cream: 275 quarts of cream at $1.05 per quart 832 ounces of sugar at $0.075 per ounce 165 minutes of labor at $37 per hour All material used was bought during the current period. A. Compute the material and labor variances. B. Comment on the results and possible causes of the variances.
Required information (The following information applies to the questions displayed below.] Jonas Materials Science (JMS) purchases its materials from several countries. As part of its cost-control program, JMS uses a standard cost system for all aspects of its operations, including purchases of direct materials. The company establishes standard costs for direct materials at the beginning of each fiscal year. Pat Butch, the purchasing manager, is happy with the result of the year just ended. He believes that the purchase price variance for direct materials for the year will be favorable and is very confident that his department has at least met the standard prices. The preliminary report from the controller's office confirms his jubilation. Following is a portion of the preliminary report: Total quantity purchased Average price per kilogran Standard price per kilogran 40,000 kilograms $50.00 $ 60.00 Budgeted quantity per quarter 5,000 kilograns In the fourth quarter, the purchasing…
Erie Company manufactures a mobile fitness device called the Jogging Mate. The company uses standards to control its costs. The labor standards that have been set for one Jogging Mate are as follows: Standard Hours Standard Rate per Hour Standard Cost 30 minutes $ 6.20 $ 3.10 During August, 10,370 hours of direct labor time were needed to make 19,600 units of the Jogging Mate. The direct labor cost totaled $63,257 for the month. What is the labor rate variance and the labor efficiency variance? The budgeted variable manufacturing overhead rate is $4.50 per direct labor-hour. During August, the company incurred $55,998 in variable manufacturing overhead cost. Compute the variable overhead rate and efficiency variances for the month.
Please redo this problem and show me steps on how to get the following questions correct, its stating I am wrong. Please help Direct Labor Variances The following data relate to labor cost for production of 6,600 cellular telephones: Actual: 4,480 hrs. at $16.10 $72,128 Standard: 4,410 hrs. at $16.40 $72,324 a. Determine the direct labor rate variance, direct labor time variance, and total direct labor cost variance. Enter all values as a positive number and then identify the variance (e.g. Favorable or Unfavorable) in the adjacent column. Rate variance $ Favorable Time variance $ Unfavorable Total direct labor cost variance $ Favorable b. The employees may have been less-experienced or poorly trained, thereby resulting in a lower labor rate than planned. The lower level of experience or training may have resulted in less efficient performance. Thus, the actual time required was more than standard. LIz C
Variance Analysis in a Process-Costing Setting, Service Firm Kolite Medical Laboratory performs comprehensive blood tests for physicians and clinics throughout the Southwest. Kolite uses a standard process-costing system for its comprehensive blood work. Skilled technicians perform blood tests. Because Kolite uses a standard costing system, equivalent units are calculated using the FIFO method. The standard cost sheet for the blood test follows (these standards were used throughout the calendar year): Direct materials (4 oz. @ $4.50) $18 Direct labor (2 hrs. @ $18.00) 36 Variable overhead (2 hrs. @ $5.00) 10 Fixed overhead (2 hrs. @ $10.00) 20 Standard cost per test $84 For the month of November, Kolite reported the following actual results: Beginning work in process: 1,250 tests, 60 percent complete Tests started: 25,000 Ending work in process: 2,500 tests, 40 percent complete Direct labor: 47,000 hours at $19 per hour Direct materials purchased and used: 102,000 at…
2 < ces ! Check my work Required information [The following information applies to the questions displayed below.] BatCo makes baseball bats. Each bat requires 1.00 pounds of wood at $22 per pound and 0.30 direct labor hour at $20 per hour. Overhead is assigned at the rate of $40 per direct labor hour. Assume the actual cost to manufacture 130 bats is $6,240.00. Compute the total cost variance and identify it as favorable or unfavorable. (Indicate the effect of the variance by selecting favorable, unfavorable, or no variance.) Actual cost Budgeted standard cost Total cost variance

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