Chillco Corporation produces containers of frozen food. During April, Chillco produced 1.450 cases of food and inclined the following actual costs.
Variable overhead | $11,000 |
Fixed overhead | 26,000 |
Actual labor cost (8,000 direct-labor hours) | 151,200 |
Actual material cost (30,000 pounds purchased and used) | 66,000 |
Standard cost and annual budget information are as follows:
Standard Costs per Case | |
Direct labor (5 hours at $18 per hour) | $ 90.00 |
Direct material (20 pounds at $2 per pound) | 40.00 |
Variable overhead (5 hours at $1.50 per hour) | 7.50 |
Fixed overhead (5 hours at $3 per hour) | 15.00 |
Total | $152.50 |
Annual Budget information | |
Variable overhead | $150,000 |
Fixed overhead | $300,000 |
Planned activity for year | 100.000 direct-labor hours |
Required:
1. Prepare as complete an analysis of cost variances as is possible from the available data.
2. Build a spreadsheet: Construct an Excel spreadsheet to solve the preceding requirement. Show how the solution will change if the following information changes: the standard rates were $17.50 per hour for direct labor, and $1.60 per direct-labor hour for variable overhead.
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