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
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. @ $5.10 per Ib.) | $ | 153.00 |
Direct labor (6 hrs. @ $15 per hr.) | 90.00 | |
Factory overheadvariable (6 hrs. @ $7 per hr.) | 42.00 | |
Factory overheadfixed (6 hrs. @ $11 per hr.) | 66.00 | |
Total standard cost | $ | 351.00 |
The predetermined overhead rate is based on a planned operating volume of 80% of the productive capacity of 56,000 units per quarter. The following flexible budget information is available.
Operating Levels | ||||||
70% | 80% | 90% | ||||
Production in units | 39,200 | 44,800 | 50,400 | |||
Standard direct labor hours | 235,200 | 268,800 | 302,400 | |||
Budgeted overhead | ||||||
Fixed factory overhead | $ | 2,956,800 | $ | 2,956,800 | $ | 2,956,800 |
Variable factory overhead | $ | 1,646,400 | $ | 1,881,600 | $ | 2,116,800 |
During the current quarter, the company operated at 90% of capacity and produced 50,400 units of product; actual direct labor totaled 299,400 hours. Units produced were assigned the following standard costs.
Direct materials (1,512,000 Ibs. @ $5.10 per Ib.) | $ | 7,711,200 |
Direct labor (302,400 hrs. @ $15 per hr.) | 4,536,000 | |
Factory overhead (302,400 hrs. @ $18 per hr.) | 5,443,200 | |
Total standard cost | $ | 17,690,400 |
Actual costs incurred during the current quarter follow.
Direct materials (1,499,000 Ibs. @ $6.30 per lb.) | $ | 9,443,700 |
Direct labor (299,400 hrs. @ $12.50 per hr.) | 3,742,500 | |
Fixed factory overhead costs | 2,604,700 | |
Variable factory overhead costs | 2,438,500 | |
Total actual costs | $ | 18,229,400 |
(a) Compute the variable overhead spending and efficiency variances. (Round "cost per unit" and "rate per hour" answers to 2 decimal places.) AH = Actual Hours SH = Standard Hours AVR = Actual Variable Rate SVR = Standard Variable Rate
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(b) Compute the fixed overhead spending and volume variances. (Round "cost per unit" and "rate per hour" answers to 2 decimal places.) AH = Actual Hours SH = Standard Hours AFR = Actual Fixed Rate SFR = Standard Fixed Rate
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(c) Compute the total overhead controllable variance.
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