Pace Labs, Inc. provides mad cow disease testing for both state and federal governmental agricultural agencies. Because the company's 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 @ $1.46per tube)$2.92Direct labor (1hour @ $24per hour)24.00Variable overhead (1hour @ $6per hour)6Fixed overhead (1hour @ $10per hour)10Total standard cost per test$42.92

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, when1,500tests were conducted, resulted in the following:

Direct materials (3,050test tubes)$4,209Direct labor (1,600hours)36,800Variable overhead7,400Fixed overhead15,000

Monthly budgeted fixed overhead is $14,000. Revenues for the month were $75,000, and selling and administrative expenses were $5,000.

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Problem 23-5A Pace Labs, Inc. provides mad cow disease testing for both state and federal governmental agricultural agencies. Because the company's 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 (2 test tubes @ $1.46 per tube) :1; 2.92 Direct labor (1 hour @ $24 per hour) 24.00 Variable overhead (1 hour @ $6 per hour) 6 Fixed overhead (1 hour @ $10 per hour) 10 Total standard cost per test $42.92 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, when 1,500 tests were conducted, resulted in the following: Direct materials (3,050 test tubes) $ 4,209 Direct labor (1,600 hours) 36,800 Variable overhead 7,400 Fixed overhead 15,000 Monthly budgeted xed overhead is $14,000. Revenues for the month were $75,000, and selling and administrative expenses were $5,000. Compute the price and quantity variances for direct materials and direct labor. l a l l a v Materials price variance Materials quantity variance Labor price variance WWW-H- Labor quantity variance Compute the total overhead variance. Total Overhead variance $ l a Prepare an income statement for management. PACE LABS, INC. Income Statement For the Month Ended November 30, 2014 as J a