Question

Trico Company set the following standard unit costs for its single product. Direct materials (30 lbs. Direct nater $4 per Ib.) Direct labor (5 hrs. @ $14 per hr.) Factory overhead-variable (5 hrs. @ $8 per hr.) Factory overhead-fixed (5 hrs. @ $10 per hr.) Total standard cost $ 120.00 70.00 40.00 50.ee $ 280.00 The predetermined overhead rate is based on a planned operating volume of 80% of the productive capacity of 60,000 units per quarter. The following flexible budget information is available. Operating Levels 70% sex 42,00 48,089 210,eee 240,eee 90% 54,000 270,eee Production in units Standard direct labor hours Budgeted overhead Fixed factory overhead Variable factory overhead $2,400,eee $2,400,000 $2,400,eee $1,689,880 $1,920,000 $2,160,eee Springfield Rifles During the current quarter, the company operated at 90% of capacity and produced 54,000 units of product: actual direct labor totaled 265,000 hours. Units produced were assigned the following standard costs. Direct materials (1,620,000 lbs. @ 54 per Ib.) Direct labor (270,000 hrs. $14 per hr.) Factory overhead (270,000 hrs. $18 per hr.) Total standard cost $ 6,480,000 3,780,000 4.850.000 $15,120,000 Actual costs incurred during the current quarter follow.