Hart Labs, Inc. provides mad cow disease testing for both state and federal governmental agricultural agencies. Because the companys 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 @ $7.00 per hour) 7.00 Fixed overhead (1 hour @ $12.00 per hour) 12.00 Total standard cost per test $53.80 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 2020, when 900 tests were conducted, resulted in the following. Direct materials (1,890 test tubes) $3,402 Direct labor (927 hours) 26,883 Variable overhead 5,643 Fixed overhead 10,809 Monthly budgeted fixed overhead is $17,280. Revenues for the month were $60,300, and selling and administrative expenses were $4,900.

Compute the price and quantity variances for direct materials and direct labor.

Materials price variance		$		UnfavorableNeither favorable nor unfavorableFavorable
Materials quantity variance		$		Neither favorable nor unfavorableUnfavorableFavorable
Labor price variance		$		FavorableUnfavorableNeither favorable nor unfavorable
Labor quantity variance		$		Neither favorable nor unfavorableUnfavorableFavorable

Compute the total overhead variance.

Total Overhead variance

$

UnfavorableNeither favorable nor unfavorableFavorable

Prepare an income statement for management.

HART LABS, INC. Income Statement For the Month Ended November 30, 2020For the Year Ended November 30, 2020November 30, 2020
					$
DividendsExpensesGross Profit (Actual)Gross Profit (at Standard)Net Income / (Loss)RevenuesTotal ExpensesTotal RevenuesTotal VarianceVariances
DividendsExpensesGross Profit (Actual)Gross Profit (at Standard)Net Income / (Loss)RevenuesTotal ExpensesTotal RevenuesTotal VarianceVariances
		$	Neither favorable nor unfavorableFavorableUnfavorable
			FavorableNeither favorable nor unfavorableUnfavorable
			UnfavorableNeither favorable nor unfavorableFavorable
			FavorableNeither favorable nor unfavorableUnfavorable
			FavorableUnfavorableNeither favorable nor unfavorable
DividendsExpensesGross Profit (Actual)Gross Profit (at Standard)Net Income / (Loss)RevenuesTotal ExpensesTotal RevenuesTotal VarianceVariances			Neither favorable nor unfavorableUnfavorableFavorable
DividendsExpensesGross Profit (Actual)Gross Profit (at Standard)Net Income / (Loss)RevenuesTotal ExpensesTotal RevenuesTotal VarianceVariances
DividendsExpensesGross Profit (Actual)Gross Profit (at Standard)Net Income / (Loss)RevenuesTotal ExpensesTotal RevenuesTotal VarianceVariances					$