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. @ $5.00 per Ib.) | $ | 150.00 |
| Direct labor (7 hrs. @ $14 per hr.) | 98.00 | |
| Factory overheadvariable (7 hrs. @ $7 per hr.) | 49.00 | |
| Factory overheadfixed (7 hrs. @ $9 per hr.) | 63.00 | |
| Total standard cost | $ | 360.00 |
The predetermined overhead rate is based on a planned operating volume of 80% of the productive capacity of 61,000 units per quarter. The following flexible budget information is available.
| Operating Levels | ||||||
| 70% | 80% | 90% | ||||
| Production in units | 42,700 | 48,800 | 54,900 | |||
| Standard direct labor hours | 298,900 | 341,600 | 384,300 | |||
| Budgeted overhead | ||||||
| Fixed factory overhead | $ | 3,074,400 | $ | 3,074,400 | $ | 3,074,400 |
| Variable factory overhead | $ | 2,092,300 | $ | 2,391,200 | $ | 2,690,100 |
During the current quarter, the company operated at 90% of capacity and produced 54,900 units of product; actual direct labor totaled 316,300 hours. Units produced were assigned the following standard costs.
| Direct materials (1,647,000 Ibs. @ $5.00 per Ib.) | $ | 8,235,000 |
| Direct labor (384,300 hrs. @ $14 per hr.) | 5,380,200 | |
| Factory overhead (384,300 hrs. @ $16 per hr.) | 6,148,800 | |
| Total standard cost | $ | 19,764,000 |
Actual costs incurred during the current quarter follow.
| Direct materials (1,364,000 Ibs. @ $7.80 per lb.) | $ | 10,639,200 |
| Direct labor (316,300 hrs. @ $11.10 per hr.) | 3,510,930 | |
| Fixed factory overhead costs | 2,348,400 | |
| Variable factory overhead costs | 2,742,200 | |
| Total actual costs | $ | 19,240,730 |
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
| Actual Variable OH Cost | Flexible Budget | Standard Cost (VOH applied) | ||||||||
| 0 | ||||||||||
| -1 | ||||||||||
| $0 | ||||||||||
| 0 | ||||||||||
(c) Compute the total overhead controllable variance.
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Applied Statistics For Public And Nonprofit Administration
Authors: Kenneth J. Meier, Jeffrey L. Brudney, John Bohte
9th Edition
1285737237, 978-1285974521, 1285974522, 978-1285737232
