Question

Required information The following information applies to the questions displayed below] Trico Company set the following standard unit costs for its single product. Direct materials (30 Ibs. $4.80 per 1b.) Direct labor (6 hrs. e $14 per hr.) Factory overhead-variable (6 hrs.e $7 per hr.) Factory overhead-fixed (6 hrs. e $12 per hr.) $144.00 84.00 42.00 72.00 Total standard cost $342.00 The predetermined overhead rate is based on a planned operating volume of 80 % of the productive capacity of 66,000 units per quarter. The following flexible budget informations available. Operating Levels 70% 90% 80% Production in units Standard direct 1abor hours Budgeted overhead Fixed factory overhead Variable factory overhead 46,200 277,200 52,800 316,800 59,400 356,400 $3,801,600 $3,801,600 $3,801,600 $1,940,400 $2,217,600 $2,494.800 During the current quarter, the company operated at 90 % of capacity and produced 59,400 units of product; actual direct labor totaled 303,800 hours. Units produced were assigned the following standard costs. Direct materials (1,782,000 Ibs. e $4.80 per Ib.) Direct labor (356,400 hrs. $14 per hr.) Factory overhead (356,400 hrs.e $19 per hr. 8,553,600 4,989,600 6,771,600 Total standard cost $20,314,800 Actual costs incurred during the current quarter follow Direct materials (1,522,000 Ibs. e $7.30 per lb.) Direct labor (303,800 hrs. e $13. 10 per hr.) Fixed factory overhead costs $11,110,600 3,979,780 2,336,900 Variable factory overhead costs 2,637,700 $20,064,980 Total actual costs Required: 1. Compute the direct materials cost variance, including its price and quantity variances. AQ Actual Quantity SQ-Standard Quantity AP Actual Price SP- Standard Price Required information Actual Cost Standard Cost AQ AP AQ SP SQ SP 0 0 2. Compute the direct labor cost variance, including its rate and efficiency variances. AH-Actual Hours SH Standard Hours AR Actual Rate SR Standard Rate Required information 2. Compute the direct labor cost variance, including its rate and efficiency variances. AH-Actual Hours SH=Standard Hours AR Actual Rate SR Standard Rate Actual Cost Standard Cost S 0 S 0 3. Compute the overhead controllable and volume variances. Controllable Variance Actual overhead Budgeted overhead Controllable variance Fixed overhead volume variance Budgeted fixed overhead Fixed overhead cost applied Fixed overhead volume variance

Answer 1

la) Compute the yariable overhead spendirg and efficiency variances Standard Cost Actual cost AP SH 572 000 30 4,F0 $11,110,600 $7,305,600.00 $8,553,600.00 $3.805.000.00 $1,248,000.00 3,805,000 Untavorable Direct material crce wariaoce- anc Fav tb) Campute the fixed averhcad spcnding and volume variance Actual cost Standard Cost AH AR SP 303 800 303.800 13.10 1400 14.00 5t $3.979.780 $4.989.600.00 | $4,253,200.00 $273,420.00 5736,400 Direct labor rate variance 273420 Favorable rce Compute thetotal overhead contrallsble wariances Overhead Controllable Variance 4,974,600 E 196 40 Actualfactorioverheae Ruclaoted morheac controllable varance Favarable ,321 30 Volume Varlance Budaeted fixcd averhead 3,801,60 Undavnurable fixed averhead volume varianoe