Farm Labs, Inc. provides mad cow disease testing for both state and federal governmental agricultural agencies

P11-5A Farm 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, Farm Labs must constantly monitor and control its testing costs. Shown below are the standard costs for a typical test.

Direct materials (2 test tubes @ $1.50 per tube) $3
Direct labor (1 hour @ $25 per hour) 25
Variable overhead (1 hour @ $5 per hour) 5
Fixed overhead (1 hour @ $10 per hour) 10
Total standard cost per test $43

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 2008, when 1,500 tests were conducted, resulted in the following:

Direct materials (3,050 test tubes) $ 4,270
Direct labor (1,600 hours) 36,800
Variable overhead 7,400
Fixed overhead 14,000

Monthly budgeted fixed overhead is $14,000. Revenues for the month were $75,000, and selling and administrative expenses were $4,000.

Instructions:
a) Compute the price and quantity variances for direct materials and direct labor.
b) Compute the total overhead variance.
c) Prepare an income statement for management.
d) Provide possible explanations for each unfavorable variance.

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Cohen and Single, LLP, are auditing the ICFR and financial statements of Copley and Sons, a public company that sells supplies to government agencies

Problem 11-28 Cohen and Single, LLP, are auditing the ICFR and financial statements of Copley and Sons, a public company that sells supplies to government agencies. Copley and Sons has a 12/31 fiscal year end. Cohen and Single conclude that the financial statements for the current and prior year are fairly stated. However, they found a material weakness in ICFR. There is a lack of separation of duties because the companys’ CFO has the ability to change passwords on employee’s computer identification numbers and has unlimited access to a computer terminal through which any journal entry can be entered without approval and review. Management’s evaluation of ICFR is also as of 12/31, and management’s report states that ICFR is not effective due to the computer security problem causing the lack of separation of duties. Draft Cohen and Single’s combined audit report with opinions on the financial statements and ICFR as described.


Click here for the solution: Cohen and Single, LLP, are auditing the ICFR and financial statements of Copley and Sons, a public company that sells supplies to government agencies

Explain the functions of the following agencies

Explain the functions of the following agencies:

a. Overseas Private Investment Corporation (OPIC)
b. Export-Import Bank (Eximbank)
c. Foreign Credit Insurance Association (FCIA)
d. International Finance Corporation (IFC)

Click here for the solution: Explain the functions of the following agencies