Required information

Use the following information for the Problems below.

[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. @ $4.00 per Ib.)	$	120.00
Direct labor (7 hrs. @ $14 per hr.)		98.00
Factory overheadvariable (7 hrs. @ $7 per hr.)		49.00
Factory overheadfixed (7 hrs. @ $11 per hr.)		77.00
Total standard cost	$	344.00

The predetermined overhead rate is based on a planned operating volume of 80% of the productive capacity of 63,000 units per quarter. The following flexible budget information is available.

	Operating Levels
		70%		80%		90%
Production in units		44,100		50,400		56,700
Standard direct labor hours		308,700		352,800		396,900
Budgeted overhead
Fixed factory overhead	$	3,880,800	$	3,880,800	$	3,880,800
Variable factory 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 of product; actual direct labor totaled 393,900 hours. Units produced were assigned the following standard costs.

Direct materials (1,701,000 Ibs. @ $4.00 per Ib.)	$	6,804,000
Direct labor (396,900 hrs. @ $14 per hr.)		5,556,600
Factory overhead (396,900 hrs. @ $18 per hr.)		7,144,200
Total standard cost	$	19,504,800

Actual costs incurred during the current quarter follow.

Direct materials (1,686,000 Ibs. @ $5.10 per lb.)	$	8,598,600
Direct labor (393,900 hrs. @ $12.00 per hr.)		4,726,800
Fixed factory overhead costs		3,380,000
Variable factory overhead costs		3,164,200
Total actual costs	$	19,869,600

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

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

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

3. Compute the overhead controllable and volume variances.

Actual Cost								Standard Cost