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Required information Skip to question [The following information applies to the questions displayed below.] Trini Company set the following standard costs per unit for its
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[The following information applies to the questions displayed below.] Trini Company set the following standard costs per unit for its single product
Direct materials (30 pounds @ $4.00 per pound) | $ 120.00 |
---|---|
Direct labor (7 hours @ $14 per hour) | 98.00 |
Variable overhead (7 hours @ $7 per hour) | 49.00 |
Fixed overhead (7 hours @ $11 per hour) | 77.00 |
Standard cost per unit | $ 344.00 |
Overhead is applied using direct labor hours. The standard overhead rate is based on a predicted activity level of 80% of the companys capacity of 63,000 units per quarter. The following additional information is available.
Operating Levels | |||
---|---|---|---|
70% | 80% | 90% | |
Production (in units) | 44,100 | 50,400 | 56,700 |
Standard direct labor hours (7 DLH/units) | 308,700 | 352,800 | 396,900 |
Budgeted overhead (flexible budget) | |||
Fixed overhead | $ 3,880,800 | $ 3,880,800 | $ 3,880,800 |
Variable overhead | $ 2,160,900 | $ 2,469,600 | $ 2,778,300 |
During the current quarter, the company operated at 90% of capacity and produced 56,700 units; actual direct labor totaled 393,900 hours. Units produced were assigned the following standard costs.
Direct materials (1,701,000 pounds @ $4.00 per pound) | $ 6,804,000 |
---|---|
Direct labor (396,900 hours @ $14 per hour) | 5,556,600 |
Overhead (396,900 hours @ $18 per hour) | 7,144,200 |
Standard (budgeted) cost | $ 19,504,800 |
Actual costs incurred during the current quarter follow.
Direct materials (1,686,000 pounds @ $5.10 per pound) | $ 8,598,600 |
---|---|
Direct labor (393,900 hours @ $12.00 per hour) | 4,726,800 |
Fixed overhead | 3,380,000 |
Variable overhead | 3,164,200 |
Actual cost | $ 19,869,600 |
Required: 1. Compute the direct materials variance, including its price and quantity variances. 2. Compute the direct labor variance, including its rate and efficiency variances. 3. Compute the overhead controllable and volume variances. Required: (a) Compute the variable overhead spending and efficiency variances. (b) Compute the fixed overhead spending and volume variances. (c) Compute the overhead controllable variance.
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