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

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 1,200 tests were conducted, resulted in the following.

Monthly budgeted fixed overhead is $17,880. Revenues for the month were $80,400, and selling and administrative expenses were $3,500.

$2.00 30.00 Direct materials (2 test tubes @ $1.00 per tube) Direct labor (1 hour @ $30 per hour) Variable overhead (1 hour @ $6.00 per hour) Fixed overhead (1 hour @ $12.00 per hour) 6.00 12.00 Total standard cost per test $50.00 Direct materials (2,520 test tubes) Direct labor (1,236 hours) Variable overhead $2,268 34,608 6,912 13,536 Fixed overhead Compute the price and quantity variances for direct materials and direct labor. Materials price variance Materials quantity variance $ Labor price variance $ Labor quantity variance $ Compute the total overhead variance. Total Overhead variance Prepare an income statement for management. VAUGHN LABS, INC. Income Statement $