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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 @ $ 6.00 per hour)		6.00
Fixed overhead ( 1 hour @ $ 12.00 per hour)		12.00
Total standard cost per test		$ 52.80

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 1,100 tests were conducted, resulted in the following.

Direct materials ( 2,310 test tubes)		$ 4,158
Direct labor ( 1,133 hours)		33,990
Variable overhead		6,534
Fixed overhead		12,309

Monthly budgeted fixed overhead is $ 15,840. Revenues for the month were $ 72,600, and selling and administrative expenses were $ 4,800.

(a)

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Your answer is partially correct.

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

Materials price variance		$		FavorableNeither favorable nor unfavorableUnfavorable
Materials quantity variance		$		UnfavorableNeither favorable nor unfavorableFavorable
Labor price variance		$		UnfavorableNeither favorable nor unfavorableFavorable
Labor quantity variance		$		Neither favorable nor unfavorableUnfavorableFavorable

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