Question: Variance Analysis in a Process-Costing Setting (Chapter 6 Required), Service Firm Aspen Medical Laboratory performs comprehensive blood tests for physicians and clinics throughout the

Variance Analysis in a Process-Costing Setting (Chapter 6 Required), Service Firm Aspen Medical Laboratory performs comprehen

Variance Analysis in a Process-Costing Setting (Chapter 6 Required), Service Firm Aspen Medical Laboratory performs comprehensive blood tests for physicians and clinics throughout the Southwest. Aspen uses a standard process-costing system for its comprehensive blood work. Skilled technicians perform the blood tests. Because Aspen uses a standard costing system, equivalent units are calculated using the FIFO method. The standard cost sheet for the blood test follows (these standards were used throughout the calendar year): Direct materials (4 oz. @ $4.50) Direct labor (2 hrs. @ $18.00) Variable overhead (2 hrs. @ $5.00) Fixed overhead (2 hrs. @ $10.00) Standard cost per test For the month of November, Aspen reported the following actual results: a. Beginning work in process: 1,250 tests, 60 percent complete b. Tests started: 25,000 c. Ending work in process: 2,500 tests, 40 percent complete d. Direct labor: 47,000 hours at $19 per hour e. Direct materials purchased and used: 102,000 at $4.25 per ounce f. Variable overhead: $144,000 g. Fixed overhead: $300,000 h. Direct materials are added at the beginning of the process. Required: $18 36 10 20 $84 1. Calculate the cost of goods transferred out (tests completed and transferred out) for the month of November. $ Does standard costing simplify process costing? 2. Calculate price and quantity variances for direct materials and direct labor. If a variance is zero, enter "0" and select "Not applicable" from the drop down box. MPV $ MUV $ LRV LEV $ THE ETH

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