Question

Required information Use the following information for the Problems below. [The following information applies to the questions displayed below.] Trico Company set the following standard unit costs for its single product. Direct materials (30 lbs. @ $4.00 per Ib.) Direct labor (7 hrs. @ $14 per hr.) Factory overhead-variable (7 hrs. @ $7 per hr.) Factory overhead-fixed (7 hrs. @ $11 per hr.) Total standard cost $120.00 98.00 49.00 77.00 $344.00 The predetermined overhead rate is based on a planned operating volume of 80% of the productive capacity of 63,000 units per quarter. The following flexible budget information is available. Operating Levels 708 80% 44,100 50,400 308, 700 352,800 90% 56,700 396,900 Production in units Standard direct labor hours Budgeted overhead Fixed factory overhead Variable factory overhead $3,880,800 $3,880,800 $3,880,800 $2,160,900 $2,469,600 $2,778,300

Answer 1

Answer Particulars 1 Material Price Variance 2 Material Quantity Variance 3 Total Material Variance(1+2) 4 Labour Price variance 5 Labour Efficiency variance 6 Total Labour variance(460-2050) working note Amount -1854600 Unfavourable 1 60000 Favourable -1794600 Unfavourable 2 787800 Favourable 2 42000 Favourable 829800 Favourable Amount 5.1 1686000 8598600 working note 1 Material Price and Quantity Variance Sno Particulars 1 Actual Price 2 Actual Quantity 3 Actual Price* Actual Quantity 4 Standard Price 5 Standard Price* Actual quantity 6 Standard quantity allowed 7 Standard quantity allowed*Standard rate 8 Material Price Variance(5-3)= 9 Material Quantity Variance(7-5) 6744000 1701000 6804000 -1854600 Unfavourable 60000 Favourable

Amount 393900 4726800 working note 2 Labour rate and Efficiency Variance Sno Particulars 1 Actual labour rate 2 Actual Hrs 3 Actual Labour* Actual Hrs 4 Standard Labour Rate 5 Standard Labour rate* Actual Hrs 6 Standard Hrs 7 Standard Hrs*Standard Labour rate 8 Labour Price Variance(5-3)= 9 Labour Efficiency Variance(7-5) 5514600 396900 5556600 787800 Favourable 42000 Favourable

Amount Amount 6544200 Particulars 1 Actual overhed(3380000+3164200) 2 Budgeted overhead Variable Cost(2469600/50400) *56700 Fixed Cost 2778300 3880800 6659100 3 Controllable Variance 114900 Favourable Amount Amount 3880800 Particulars 1 Budgeted Fixed overhead 2 Fixed overhead cost Appiled Variable overhead per DL hour(3880800/352800) Standard number of DL hour(352800/50400)*56700 4 Fixed overhead Volume Variance 11 396900 4365900 - 485100 Unfavourable