Chem Labs Inc. has entered into a contract with the provincial government to conduct some tests. The company analyzes the chemical and bacterial composition of well water in various municipalities. The contract price is $25.20 per test performed. The normal volume is 10,000 tests per month.
Each test requires two testing kits, which are $3.80 each at standard price. Direct labour to perform the test at standard is 10 minutes at $28.80 per hour.
At normal volume, the overhead costs for the month are as follows:
Variable overhead costs:
Indirect labour $ 18,000
Utilities 4,000
Labour-related costs 15,000
Laboratory maintenance 11,000
Total Variable O/H $ 48,000
Fixed overhead costs:
Supervisor $ 30,000
Amortization 28,000
Base utilities 9,000
Insurance 2,000
Total Fixed O/H $ 69,000
Total Overhead Expenses $ 117,000
The company applies all fixed and variable overhead based on direct labour-hours used.
During May, 9,000 tests were performed. The records show the following actual costs and production data:
Activity Actual cost
Number of test kits purchased 19,000 $ 70,300
Number of test kits used 18,500
Direct labour 1,623 hours $ 37,646
Total actual overhead costs:
Variable $ 45,200
Fixed $ 68,500
Test kits are kept in inventory at standard cost. At the end of May, no tests were in process.
Required
Calculate the total estimated Overhead cost and determine if there is over- or underapplied overhead.
Chem Labs Inc. has entered into a contract with the provincial government to conduct some tests....
Chem Labs Inc. has entered into a contract with the provincial government to conduct some tests. The company analyzes the chemical and bacterial composition of well water in various municipalities. The contract price is $25.20 per test performed. The normal volume is 10,000 tests per month. Each test requires two testing kits, which are $3.80 each at standard price. Direct labour to perform the test at standard is 10 minutes at $28.80 per hour. At normal volume, the overhead costs...
Bio Labs Inc. has entered into a contract with the provincial government to conduct some tests. The company analyzes the chemical and bacterial composition of well water in various municipalities. The contract price is $25.20 per test performed. The normal volume is 10,000 tests per month Each test requires two testing kits, which are $3.80 each at standard price. Direct labour to perform the test at standard is 10 minutes at $28.80 per hour. At normal volume, the overhead costs...
Vaughn Construction Consultants performs cement core tests in its Greenville laboratory. The following standard costs for the tests have been developed by the company’s controller, Landon Vaughn, based on performing 2,100 core tests per month. Standard Price Standard Quantity Standard Cost Direct materials $0.50 per pound 4 pounds $2.00 Direct labor $10 per DLH 0.50 DLH 5.00 Variable overhead $9 per DLH 0.50 DLH 4.50 Fixed overhead $16 per DLH 1 DLH 16.00 Total standard cost per test $27.50 At...
Hi-Tek Labs performs steroid testing services for colleges and universities. Because the company works only with educational institutions, the price of each test is strictly regulated. Therefore, the costs incurred must be carefully monitored and controlled. Shown below are the standard costs for a typical test: Direct materials (1 Petri dish at $1.80 per dish) $ 1.80 Direct labour (0.5 hours at $20.50 per hour) 10.25 Variable overhead (0.5 hours at $8 per hour) 4.00 Fixed overhead (0.5 hours at...
Hi-Tek Labs performs steroid testing services for colleges and universities. Because the company works only with educational institutions, the price of each test is strictly regulated. Therefore, the costs incurred must be carefully monitored and controlled. Shown below are the standard costs for a typical test: Direct materials (1 Petri dish at $1.80 per dish) $ 1.80 Direct labour (0.5 hours at $20.50 per hour) 10.25 Variable overhead (0.5 hours at $8 per hour) 4.00 Fixed overhead (0.5 hours at...
Carson Construction Consultants performs cement core tests in its Greenville laboratory. The following standard costs for the tests have been developed by the company’s controller, Landon Carson, based on performing 2,100 core tests per month. Standard Price Standard Quantity Standard Cost Direct materials $0.50 per pound 4 pounds $2.00 Direct labor $10 per DLH .5 DLH 5.00 Variable overhead $9 per DLH .5 DLH 4.50 Fixed overhead $16 per DLH .5 DLH 8.00 Total standard cost per test $19.50 At...
Hart 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, Hart Labs must constantly monitor and control its testing costs. Shown below are the standard costs for a typical test. t $3.80 Direct materials (2 test tubes@$1.90 per tube) 31.00 Direct labor (1 hour @ $31 per hour) 7.00 Variable overhead (1 hour @ $7.00 per hour) 12.00 Fixed overhead (1 hour...
Sunland Construction Consultants performs cement core tests in its Greenville laboratory. The following standard costs for the tests have been developed by the company’s controller, Landon Sunland, based on performing 2,100 core tests per month. Standard Price Standard Quantity Standard Cost Direct materials $0.50 per pound 4 pounds $2.00 Direct labor $11 per DLH 0.50 DLH 5.50 Variable overhead $9 per DLH 0.50 DLH 4.50 Fixed overhead $16 per DLH 1 DLH 16.00 Total standard cost per test $28.00 At...
Problem 24-05A a-c (Video) (Part Level Submission) Hart 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, Hart Labs must constantly monitor and control its testing costs. Shown below are the standard costs for a typical test. $2.92 24.00 Direct materials (2 test tubes @ $1.46 per tube) Direct labor (1 hour @ $24 per hour) Variable overhead (1 hour @ $6.00...
Hart 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, 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 @ $1.40 per tube) $2.80 Direct labor (1 hour @ $32 per hour) 32.00 Variable overhead (1 hour @ $6.00 per hour) 6.00 Fixed overhead (1 hour...