2.) Pace 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, Pace Labs must constantly monitor and control its testing costs. Shown below are the standard costs for a typical test Direct materials (2 test tubes @ S1.50 per tube) Direct labor (I hour @$25 per hour) Variable overhead (1 hour@ $5 per hour) Fixed overhead (1 hour@S10 per hour) Total standard cost per test s 3 s 25 S 5 S 10 $ 43 The lab does not maintain an inventory of test tubes. Therefore, the tubes purchased each month are used that month. Actual activity for the month of November 2014, when 1,500 tests were conducted, resulted in the following Direct materials (3,050 test tubes@$1.40 per tube) Direct labor (1,600 hours@ $23 per hour) Variable overhead Fixed overhead $ 4,270 $36,800 7,400 15,000 Monthly budgeted fixed overhead is $14,000. Revenues for the month were $75,000. (a) Compute the total, price and quantity variances for direct materials and direct labor. (b) Compute the total, controllable and volume variances for overhead (c) Prepare a standard cost income statement for management through gross profit at actual. (d) Assume that the Pace Lab is a manufacturing company instead of service firm and use the variances that you have calculated in part a and b: journalize the purchase and usage of direct materials" (all materials purchased used in the current month), - sale of goods (record COGS also - and close all . variance accounts