Problem 21-4A Computation of materials, labor, and overhead variances LO P2, P3

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Trico Company set the following standard unit costs for its single product.

Direct materials (26 Ibs. @ $5 per Ib.)	$	130.00
Direct labor (10 hrs. @ $10 per hr.)		100.00
Factory overheadvariable (10 hrs. @ $6 per hr.)		60.00
Factory overheadfixed (10 hrs. @ $9 per hr.)		90.00
Total standard cost	$	380.00

The predetermined overhead rate is based on a planned operating volume of 50% of the productive capacity of 60,000 units per quarter. The following flexible budget information is available.

	Operating Levels
		40%		50%		60%
Production in units		24,000		30,000		36,000
Standard direct labor hours		240,000		300,000		360,000
Budgeted overhead
Fixed factory overhead	$	2,700,000	$	2,700,000	$	2,700,000
Variable factory overhead	$	1,440,000	$	1,800,000	$	2,160,000

During the current quarter, the company operated at 60% of capacity and produced 36,000 units of product; actual direct labor totaled 353,000 hours. Units produced were assigned the following standard costs:

Direct materials (936,000 Ibs. @ $5 per Ib.)	$	4,680,000
Direct labor (360,000 hrs. @ $10 per hr.)		3,600,000
Factory overhead (360,000 hrs. @ $15 per hr.)		5,400,000
Total standard cost	$	13,680,000

Actual costs incurred during the current quarter follow:

Direct materials (931,000 Ibs. @ $5.10 per lb.)	$	4,748,100
Direct labor (353,000 hrs. @ $9.75 per hr.)		3,441,750
Fixed factory overhead costs		3,130,377
Variable factory overhead costs		2,930,566
Total actual costs	$	14,250,793

Problem 21-4A Part 1

Required:
1.	Compute the direct materials cost variance, including its price and quantity variances.

Problem 21-4A Part 2

2.	Compute the direct labor variance, including its rate and efficiency variances.

Problem 21-4A Part 3

3.	Compute the overhead controllable and volume variances.