Cole laboratories makes and sells a lawn fertilizer called Fastgro. The company has developed standard costs for one bag of Fastgro as follows: Standard Standard Cost Quantity per Bag Direct material......................................... 20 pounds $8.00 Direct labor............................................. 0.1 hours $1.10 Variable overhead.................................... 0.1 hours $0.40 The company had no beginning inventories of any kind on Jan. 1. Variable overhead is applied to production on the basis of standard direct labor-hours. During January, the following activity was recorded by the company: