Pace 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, Pace Labs must constantly monitor and control its testing costs Shown below are the standard costs for a typical test Direct materials (2test tubes $2 00per tube) $4 00 Direct labor (1hour $30per hour) 30 00 Variable overhead (1hour $6per hour) 6 Fixed overhead (1hour $13per hour) 13 Total standard cost per test $53 00 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, when1,000tests were conducted, resulted in the following Direct materials (2,060test tubes) $3,832 Direct labor (1,050hours) 30,450 Variable overhead 6,640 Fixed overhead 11,450 Monthly budgeted fixed overhead is $17,810 Revenues for the month were $65,000, and selling and administrative expenses were $4,390 Warning Don't show me this message again for the assignment Ok Cancel (a) Your answer is correct Compute the price and quantity variances for direct materials and direct labor Materials price variance $288 FavorableUnfavorableres EAT 1352271800546 0 8995404101321601 004 Materials quantity variance $120 UnfavorableFavorableres EAT 1352271800546 0 8995404101321601 010 Labor price variance $1,050 UnfavorableFavorableres EAT 1352271800546 0 8995404101321601 014 Labor quantity variance $1,500 UnfavorableFavorableres EAT 1352271800546 0 8995404101321601 020 Warning Don't show me this message again for the assignment Ok Cancel Click if you would like to Show Work for this question Open Show Work Show Solution SHOW ANSWER HIDDEN Show Answer Link to Text Attempts 1 of 3 used (b) Your answer is correct Compute the total overhead variance Total Overhead variance $910 UnfavorableFavorableres EAT 1352271800546 0 8995404101321601 024 Warning Don't show me this message again for the assignment Ok Cancel Click if you would like to Show Work for this question Open Show Work Show Solution SHOW ANSWER HIDDEN Show Answer Link to Text Attempts 3 of 3 used (c) Your answer is partially correct Try again Prepare an income statement for management PACE LABS, INC Income Statement For the Month Ended November 30, 2014 Cost of Service Provided (at standard)Gross Profit (actual)Gross Profit (at standard)Labor PriceLabor QuantityMaterials PriceMaterials QuantityNet Income (Loss)OverheadService RevenueSelling and Administrative ExpensesTotal VarianceVariancesres EAT 1352271800546 0 8995404101321601 036 $65,000 Cost of Service Provided (at standard)Gross Profit (actual)Gross Profit (at standard)Labor PriceLabor QuantityMaterials PriceMaterials QuantityNet Income (Loss)OverheadService RevenueSelling and Administrative ExpensesTotal VarianceVariancesres EAT 1352271800546 0 8995404101321601 043 52,372 Cost of Service Provided (at standard)Gross Profit (actual)Gross Profit (at standard)Labor PriceLabor QuantityMaterials PriceMaterials QuantityNet Income (Loss)OverheadService RevenueSelling and Administrative ExpensesTotal VarianceVariancesres EAT 1352271800546 0 8995404101321601 061 12,628 Cost of Service Provided (at standard)Gross Profit (actual)Gross Profit (at standard)Labor PriceLabor QuantityMaterials PriceMaterials QuantityNet Income (Loss)OverheadService RevenueSelling and Administrative ExpensesTotal VarianceVariancesres EAT 1352271800546 0 8995404101321601 087 Cost of Service Provided (at standard)Gross Profit (actual)Gross Profit (at standard)Labor PriceLabor QuantityMaterials PriceMaterials QuantityNet Income (Loss)OverheadService RevenueSelling and Administrative ExpensesTotal VarianceVariancesres EAT 1352271800546 0 8995404101321601 094 $288 FUNAres EAT 1352271800546 0 8995404101321601 105 Cost of Service Provided (at standard)Gross Profit (actual)Gross Profit (at standard)Labor PriceLabor QuantityMaterials PriceMaterials QuantityNet Income (Loss)OverheadService RevenueSelling and Administrative ExpensesTotal VarianceVariancesres EAT 1352271800546 0 8995404101321601 114 120 UFNAres EAT 1352271800546 0 8995404101321601 125 Cost of Service Provided (at standard)Gross Profit (actual)Gross Profit (at standard)Labor PriceLabor QuantityMaterials PriceMaterials QuantityNet Income (Loss)OverheadService RevenueSelling and Administrative ExpensesTotal VarianceVariancesres EAT 1352271800546 0 8995404101321601 130 1,050 NAFUres EAT 1352271800546 0 8995404101321601 143 Cost of Service Provided (at standard)Gross Profit (actual)Gross Profit (at standard)Labor PriceLabor QuantityMaterials PriceMaterials QuantityNet Income (Loss)OverheadService RevenueSelling and Administrative ExpensesTotal VarianceVariancesres EAT 1352271800546 0 8995404101321601 150 1,500 FUNAres EAT 1352271800546 0 8995404101321601 163 Cost of Service Provided (at standard)Gross Profit (actual)Gross Profit (at standard)Labor PriceLabor QuantityMaterials PriceMaterials QuantityNet Income (Loss)OverheadService RevenueSelling and Administrative ExpensesTotal VarianceVariancesres EAT 1352271800546 0 8995404101321601 173 910 NAFUres EAT 1352271800546 0 8995404101321601 181 Cost of Service Provided (at standard)Gross Profit (actual)Gross Profit (at standard)Labor PriceLabor QuantityMaterials PriceMaterials QuantityNet Income (Loss)OverheadService RevenueSelling and Administrative ExpensesTotal VarianceVariancesres EAT 1352271800546 0 8995404101321601 195 628 FNAUres EAT 1352271800546 0 8995404101321601 198 Cost of Service Provided (at standard)Gross Profit (actual)Gross Profit (at standard)Labor PriceLabor QuantityMaterials PriceMaterials QuantityNet Income (Loss)OverheadService RevenueSelling and Administrative ExpensesTotal VarianceVariancesres EAT 1352271800546 0 8995404101321601 204 30,156 Cost of Service Provided (at standard)Gross Profit (actual)Gross Profit (at standard)Labor PriceLabor QuantityMaterials PriceMaterials QuantityNet Income (Loss)OverheadService RevenueSelling and Administrative ExpensesTotal VarianceVariancesres EAT 1352271800546 0 8995404101321601 229 4,390 Cost of Service Provided (at standard)Gross Profit (actual)Gross Profit (at standard)Labor PriceLabor QuantityMaterials PriceMaterials QuantityNet Income (Loss)OverheadService RevenueSelling and Administrative ExpensesTotal VarianceVariancesres EAT 1352271800546 0 8995404101321601 242 $25,766 Warning Don't show me this message again for the assignment Ok Cancel Click if you would like to Show Work for this question Open Show Work Modify Show Work ONLY NEED HELP COMPUTING COST OF GOODS (STANDARD)

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Pace Labs, Inc. provides mad cow disease testing for both state and federal governmental agricultural agencies. Because the companys customers are governmental agencies, prices are

Pace 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, Pace Labs must constantly monitor and control its testing costs. Shown below are the standard costs for a typical test.

Direct materials (2test tubes @ $2.00per tube)	$4.00
Direct labor (1hour @ $30per hour)	30.00
Variable overhead (1hour @ $6per hour)	6
Fixed overhead (1hour @ $13per hour)	13
Total standard cost per test	$53.00

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, when1,000tests were conducted, resulted in the following:

Direct materials (2,060test tubes)	$3,832
Direct labor (1,050hours)	30,450
Variable overhead	6,640
Fixed overhead	11,450

Monthly budgeted fixed overhead is $17,810. Revenues for the month were $65,000, and selling and administrative expenses were $4,390.

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(a)


	Your answer is correct.

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

Materials price variance	$288	FavorableUnfavorableres_EAT_1352271800546_0_8995404101321601_004
Materials quantity variance	$120	UnfavorableFavorableres_EAT_1352271800546_0_8995404101321601_010
Labor price variance	$1,050	UnfavorableFavorableres_EAT_1352271800546_0_8995404101321601_014
Labor quantity variance	$1,500	UnfavorableFavorableres_EAT_1352271800546_0_8995404101321601_020

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Attempts: 1 of 3 used

(b)


	Your answer is correct.

Compute the total overhead variance.

Total Overhead variance

$910

UnfavorableFavorableres_EAT_1352271800546_0_8995404101321601_024

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Attempts: 3 of 3 used

(c)


	Your answer is partially correct.Try again.

Prepare an income statement for management.

PACE LABS, INC. Income Statement For the Month Ended November 30, 2014
Cost of Service Provided (at standard)Gross Profit (actual)Gross Profit (at standard)Labor PriceLabor QuantityMaterials PriceMaterials QuantityNet Income / (Loss)OverheadService RevenueSelling and Administrative ExpensesTotal VarianceVariancesres_EAT_1352271800546_0_8995404101321601_036	$65,000
Cost of Service Provided (at standard)Gross Profit (actual)Gross Profit (at standard)Labor PriceLabor QuantityMaterials PriceMaterials QuantityNet Income / (Loss)OverheadService RevenueSelling and Administrative ExpensesTotal VarianceVariancesres_EAT_1352271800546_0_8995404101321601_043	52,372
Cost of Service Provided (at standard)Gross Profit (actual)Gross Profit (at standard)Labor PriceLabor QuantityMaterials PriceMaterials QuantityNet Income / (Loss)OverheadService RevenueSelling and Administrative ExpensesTotal VarianceVariancesres_EAT_1352271800546_0_8995404101321601_061	12,628
Cost of Service Provided (at standard)Gross Profit (actual)Gross Profit (at standard)Labor PriceLabor QuantityMaterials PriceMaterials QuantityNet Income / (Loss)OverheadService RevenueSelling and Administrative ExpensesTotal VarianceVariancesres_EAT_1352271800546_0_8995404101321601_087
Cost of Service Provided (at standard)Gross Profit (actual)Gross Profit (at standard)Labor PriceLabor QuantityMaterials PriceMaterials QuantityNet Income / (Loss)OverheadService RevenueSelling and Administrative ExpensesTotal VarianceVariancesres_EAT_1352271800546_0_8995404101321601_094	$288	FUNAres_EAT_1352271800546_0_8995404101321601_105
Cost of Service Provided (at standard)Gross Profit (actual)Gross Profit (at standard)Labor PriceLabor QuantityMaterials PriceMaterials QuantityNet Income / (Loss)OverheadService RevenueSelling and Administrative ExpensesTotal VarianceVariancesres_EAT_1352271800546_0_8995404101321601_114	120	UFNAres_EAT_1352271800546_0_8995404101321601_125
Cost of Service Provided (at standard)Gross Profit (actual)Gross Profit (at standard)Labor PriceLabor QuantityMaterials PriceMaterials QuantityNet Income / (Loss)OverheadService RevenueSelling and Administrative ExpensesTotal VarianceVariancesres_EAT_1352271800546_0_8995404101321601_130	1,050	NAFUres_EAT_1352271800546_0_8995404101321601_143
Cost of Service Provided (at standard)Gross Profit (actual)Gross Profit (at standard)Labor PriceLabor QuantityMaterials PriceMaterials QuantityNet Income / (Loss)OverheadService RevenueSelling and Administrative ExpensesTotal VarianceVariancesres_EAT_1352271800546_0_8995404101321601_150	1,500	FUNAres_EAT_1352271800546_0_8995404101321601_163
Cost of Service Provided (at standard)Gross Profit (actual)Gross Profit (at standard)Labor PriceLabor QuantityMaterials PriceMaterials QuantityNet Income / (Loss)OverheadService RevenueSelling and Administrative ExpensesTotal VarianceVariancesres_EAT_1352271800546_0_8995404101321601_173	910	NAFUres_EAT_1352271800546_0_8995404101321601_181
Cost of Service Provided (at standard)Gross Profit (actual)Gross Profit (at standard)Labor PriceLabor QuantityMaterials PriceMaterials QuantityNet Income / (Loss)OverheadService RevenueSelling and Administrative ExpensesTotal VarianceVariancesres_EAT_1352271800546_0_8995404101321601_195	628	FNAUres_EAT_1352271800546_0_8995404101321601_198
Cost of Service Provided (at standard)Gross Profit (actual)Gross Profit (at standard)Labor PriceLabor QuantityMaterials PriceMaterials QuantityNet Income / (Loss)OverheadService RevenueSelling and Administrative ExpensesTotal VarianceVariancesres_EAT_1352271800546_0_8995404101321601_204	30,156
Cost of Service Provided (at standard)Gross Profit (actual)Gross Profit (at standard)Labor PriceLabor QuantityMaterials PriceMaterials QuantityNet Income / (Loss)OverheadService RevenueSelling and Administrative ExpensesTotal VarianceVariancesres_EAT_1352271800546_0_8995404101321601_229	4,390
Cost of Service Provided (at standard)Gross Profit (actual)Gross Profit (at standard)Labor PriceLabor QuantityMaterials PriceMaterials QuantityNet Income / (Loss)OverheadService RevenueSelling and Administrative ExpensesTotal VarianceVariancesres_EAT_1352271800546_0_8995404101321601_242	$25,766