Question
[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.
[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.) | $ | 144.00 |
| Direct labor (8 hrs. @ $16 per hr.) | 128.00 | |
| Factory overheadvariable (8 hrs. @ $9 per hr.) | 72.00 | |
| Factory overheadfixed (8 hrs. @ $12 per hr.) | 96.00 | |
| Total standard cost | $ | 440.00 |
The predetermined overhead rate is based on a planned operating volume of 80% of the productive capacity of 59,000 units per quarter. The following flexible budget information is available.
| Operating Levels | ||||||
| 70% | 80% | 90% | ||||
| Production in units | 41,300 | 47,200 | 53,100 | |||
| Standard direct labor hours | 330,400 | 377,600 | 424,800 | |||
| Budgeted overhead | ||||||
| Fixed factory overhead | $ | 4,531,200 | $ | 4,531,200 | $ | 4,531,200 |
| Variable factory overhead | $ | 2,973,600 | $ | 3,398,400 | $ | 3,823,200 |
During the current quarter, the company operated at 90% of capacity and produced 53,100 units of product; actual direct labor totaled 420,800 hours. Units produced were assigned the following standard costs.
| Direct materials (1,593,000 Ibs. @ $4.80 per Ib.) | $ | 7,646,400 |
| Direct labor (424,800 hrs. @ $16 per hr.) | 6,796,800 | |
| Factory overhead (424,800 hrs. @ $21 per hr.) | 8,920,800 | |
| Total standard cost | $ | 23,364,000 |
Actual costs incurred during the current quarter follow.
| Direct materials (1,582,000 Ibs. @ $5.90 per lb.) | $ | 9,333,800 |
| Direct labor (420,800 hrs. @ $12.50 per hr.) | 5,260,000 | |
| Fixed factory overhead costs | 4,297,600 | |
| Variable factory overhead costs | 4,023,200 | |
| Total actual costs | $ | 22,914,600 |
(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
(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
(c) Compute the total overhead controllable variance.
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Managerial Accounting
Authors: McGraw Hill Education
14th Edition
1121182518, 978-1121182516
