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Posted on Aug 07, 2024

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

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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 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 Ib.) Direct labor (6 hrs. @ $14 per hr.) Factory overhead-variable (6 hrs. @ $7 per hr.) Factory Overhead-fixed (6 hrs. @ $9 per hr.) $144.00 84.00 42.00 54.00 $324.00 Total standard cost The predetermined overhead rate is based on a planned operating volume of 80% of the productive capacity of 57,000 units per quarter. The following flexible budget information is available. Operating Levels 70% 80% 39,900 45,600 239,400 273,600 90% 51,300 307,800 Production in units Standard direct labor hours Budgeted overhead Fixed factory overhead Variable factory overhead $2,462,400 $2,462,400 $2,462,400 $1,675,800 $1,915,200 $2,154,600 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 Answer is complete and correct. Actual Cost X X o AQ 1,519,000 AP $ 7.30 AQ 1,519,000 x X Standard Cost SQ OX | SP 1,539,000 X $ 4.80 SP $ 4.80 11,088,700 7,291,200 7,387,200 $ 3,797,500 $96,000 Unfavorable Direct materials price variance Direct materials quantity variance 3,797,500 96,000 Favorable Total direct materials variance 3,701,500 Unfavorable 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 Answer is complete and correct. Actual Cost AH X 304,800 x AR $ 13.00 AH 304,800 X X SR $ 14.00 Standard Cost X X SH 307,800 SR $ 14.00 3,962,400 4,267,200 4,309,200 304,800 $42,000 Direct labor rate variance Favorable 304,800 42,000 Direct labor efficiency variance Favorable Total direct labor variance 346,800 Favorable During the current quarter, the company operated at 90% of capacity and produced 51,300 units of product; actual direct labor totaled 304,800 hours. Units produced were assigned the following standard costs. Direct materials (1,539,000 Ibs. @ $4.80 per Ib.) Direct labor (307,800 hrs. @ $14 per hr.) Factory overhead (307,800 hrs. @ $16 per hr.) Total standard cost $ 7,387,200 4,309,200 4,924,800 $16,621,200 Actual costs incurred during the current quarter follow. Direct materials (1,519,000 Ibs. @ $7.30 per lb.) Direct labor (304,800 hrs. @ $13.00 per hr.) Fixed factory overhead costs Variable factory overhead costs Total actual costs $11,088,700 3,962,400 2,337,000 2,187,800 $19,575,900 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 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 Ib.) Direct labor (6 hrs. @ $14 per hr.) Factory overhead-variable (6 hrs. @ $7 per hr.) Factory Overhead-fixed (6 hrs. @ $9 per hr.) $144.00 84.00 42.00 54.00 $324.00 Total standard cost The predetermined overhead rate is based on a planned operating volume of 80% of the productive capacity of 57,000 units per quarter. The following flexible budget information is available. Operating Levels 70% 80% 39,900 45,600 239,400 273,600 90% 51,300 307,800 Production in units Standard direct labor hours Budgeted overhead Fixed factory overhead Variable factory overhead $2,462,400 $2,462,400 $2,462,400 $1,675,800 $1,915,200 $2,154,600 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 Answer is complete and correct. Actual Cost X X o AQ 1,519,000 AP $ 7.30 AQ 1,519,000 x X Standard Cost SQ OX | SP 1,539,000 X $ 4.80 SP $ 4.80 11,088,700 7,291,200 7,387,200 $ 3,797,500 $96,000 Unfavorable Direct materials price variance Direct materials quantity variance 3,797,500 96,000 Favorable Total direct materials variance 3,701,500 Unfavorable 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 Answer is complete and correct. Actual Cost AH X 304,800 x AR $ 13.00 AH 304,800 X X SR $ 14.00 Standard Cost X X SH 307,800 SR $ 14.00 3,962,400 4,267,200 4,309,200 304,800 $42,000 Direct labor rate variance Favorable 304,800 42,000 Direct labor efficiency variance Favorable Total direct labor variance 346,800 Favorable During the current quarter, the company operated at 90% of capacity and produced 51,300 units of product; actual direct labor totaled 304,800 hours. Units produced were assigned the following standard costs. Direct materials (1,539,000 Ibs. @ $4.80 per Ib.) Direct labor (307,800 hrs. @ $14 per hr.) Factory overhead (307,800 hrs. @ $16 per hr.) Total standard cost $ 7,387,200 4,309,200 4,924,800 $16,621,200 Actual costs incurred during the current quarter follow. Direct materials (1,519,000 Ibs. @ $7.30 per lb.) Direct labor (304,800 hrs. @ $13.00 per hr.) Fixed factory overhead costs Variable factory overhead costs Total actual costs $11,088,700 3,962,400 2,337,000 2,187,800 $19,575,900