menu
bartleby
search
close search
Hit Return to see all results
close solutoin list

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): 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: 1. Explain why the FIFO method is used for process costing when a standard costing system has been adopted. 2. Calculate the cost of goods transferred out (tests completed and transferred out) for the month of November. Does standard costing simplify process costing? Explain. 3. Calculate price and quantity variances for direct materials and direct labor.

BuyFindarrow_forward

Cornerstones of Cost Management (C...

4th Edition
Don R. Hansen + 1 other
Publisher: Cengage Learning
ISBN: 9781305970663

Solutions

Chapter
Section
BuyFindarrow_forward

Cornerstones of Cost Management (C...

4th Edition
Don R. Hansen + 1 other
Publisher: Cengage Learning
ISBN: 9781305970663
Chapter 9, Problem 40P
Textbook Problem
304 views

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):

Chapter 9, Problem 40P, Aspen Medical Laboratory performs comprehensive blood tests for physicians and clinics throughout

For the month of November, Aspen reported the following actual results:

  1. a. Beginning work in process: 1,250 tests, 60 percent complete
  2. b. Tests started: 25,000
  3. c. Ending work in process: 2,500 tests, 40 percent complete
  4. d. Direct labor: 47,000 hours at $19 per hour
  5. e. Direct materials purchased and used: 102,000 at $4.25 per ounce
  6. f. Variable overhead: $144,000
  7. g. Fixed overhead: $300,000
  8. h. Direct materials are added at the beginning of the process.

Required:

  1. 1. Explain why the FIFO method is used for process costing when a standard costing system has been adopted.
  2. 2. Calculate the cost of goods transferred out (tests completed and transferred out) for the month of November. Does standard costing simplify process costing? Explain.
  3. 3. Calculate price and quantity variances for direct materials and direct labor.

1.

To determine

Describe the reason why FIFO method is used for process costing after adopting standard costing.

Explanation of Solution

The main reason for using FIFO method is that it provides a measure of the current period’s output...

2.

To determine

Compute the cost of goofs transferred out for the month of November and state whether standing costing simplify process costing.

3.

To determine

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

Still sussing out bartleby?

Check out a sample textbook solution.

See a sample solution

The Solution to Your Study Problems

Bartleby provides explanations to thousands of textbook problems written by our experts, many with advanced degrees!

Get Started

Chapter 9 Solutions

Cornerstones of Cost Management (Cornerstones Series)
Show all chapter solutions
add
Ch. 9 - Explain why the variable overhead spending...Ch. 9 - What is the cause of an unfavorable volume...Ch. 9 - What are control limits, and how are they set?Ch. 9 - Explain how the two-, three-, and four-variance...Ch. 9 - Explain what mix and yield variances are.Ch. 9 - Guillermos Oil and Lube Company is a service...Ch. 9 - Direct Materials Usage Variance Refer to...Ch. 9 - Refer to Cornerstone Exercise 9.1. Guillermos Oil...Ch. 9 - Kavallia Company set a standard cost for one item...Ch. 9 - Yohan Company has the following balances in its...Ch. 9 - Standish Company manufactures consumer products...Ch. 9 - Variances Refer to Cornerstone Exercise 9.6....Ch. 9 - Standish Company manufactures consumer products...Ch. 9 - Mangia Pizza Company makes frozen pizzas that are...Ch. 9 - Mangia Pizza Company makes frozen pizzas that are...Ch. 9 - Refer to Cornerstone Exercise 9.9. Required: 1....Ch. 9 - Quincy Farms is a producer of items made from farm...Ch. 9 - During the year, Dorner Company produced 280,000...Ch. 9 - Zoller Company produces a dark chocolate candy...Ch. 9 - Oerstman, Inc., uses a standard costing system and...Ch. 9 - Refer to the data in Exercise 9.15. Required: 1....Ch. 9 - Chypre, Inc., produces a cologne mist using a...Ch. 9 - Refer to Exercise 9.17. Chypre, Inc., purchased...Ch. 9 - Delano Company uses two types of direct labor for...Ch. 9 - Jameson Company produces paper towels. The company...Ch. 9 - Madison Company uses the following rule to...Ch. 9 - Laughlin, Inc., uses a standard costing system....Ch. 9 - Responsibility for the materials price variance...Ch. 9 - Which of the following is true concerning labor...Ch. 9 - A company uses a standard costing system. At the...Ch. 9 - Relevant information for direct labor is as...Ch. 9 - Which of the following is the most likely...Ch. 9 - Haversham Corporation produces dress shirts. The...Ch. 9 - Plimpton Company produces countertop ovens....Ch. 9 - Algers Company produces dry fertilizer. At the...Ch. 9 - Misterio Company uses a standard costing system....Ch. 9 - Petrillo Company produces engine parts for large...Ch. 9 - Business Specialty, Inc., manufactures two...Ch. 9 - Vet-Pro, Inc., produces a veterinary grade...Ch. 9 - Refer to the data in Problem 9.34. Vet-Pro, Inc.,...Ch. 9 - Energy Products Company produces a gasoline...Ch. 9 - Nuevo Company produces a single product. Nuevo...Ch. 9 - Ingles Company manufactures external hard drives....Ch. 9 - As part of its cost control program, Tracer...Ch. 9 - Aspen Medical Laboratory performs comprehensive...Ch. 9 - Leather Works is a family-owned maker of leather...

Additional Business Textbook Solutions

Find more solutions based on key concepts
Show solutions add
LOAN AMORTIZATION Jan sold her house on December 31 and took a 10,000 mortgage as part of the payment. The 10-y...

Fundamentals of Financial Management, Concise Edition (with Thomson ONE - Business School Edition, 1 term (6 months) Printed Access Card) (MindTap Course List)

How do firms forecast the demand for human resources?

Foundations of Business (MindTap Course List)

Describe the procedures for closing the factory overhead account.

College Accounting, Chapters 1-27 (New in Accounting from Heintz and Parry)

What does the invisible hand of the marketplace do?

Principles of Macroeconomics (MindTap Course List)

What is decentralization?

Managerial Accounting: The Cornerstone of Business Decision-Making

How do unions affect the natural rate of unemployment?

Brief Principles of Macroeconomics (MindTap Course List)

Is a trade surplus indicative of a strong, healthy economy? Why or why not?

Economics: Private and Public Choice (MindTap Course List)