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[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. @ $4.40 per Ib.) $ 132.00
Direct labor (6 hrs. @ $14 per hr.) 84.00
Factory overheadvariable (6 hrs. @ $9 per hr.) 54.00
Factory overheadfixed (6 hrs. @ $12 per hr.) 72.00
Total standard cost $ 342.00

The predetermined overhead rate is based on a planned operating volume of 80% of the productive capacity of 55,000 units per quarter. The following flexible budget information is available.

Operating Levels
70% 80% 90%
Production in units 38,500 44,000 49,500
Standard direct labor hours 231,000 264,000 297,000
Budgeted overhead
Fixed factory overhead $ 3,168,000 $ 3,168,000 $ 3,168,000
Variable factory overhead $ 2,079,000 $ 2,376,000 $ 2,673,000

During the current quarter, the company operated at 90% of capacity and produced 49,500 units of product; actual direct labor totaled 292,000 hours. Units produced were assigned the following standard costs.

Direct materials (1,485,000 Ibs. @ $4.40 per Ib.) $ 6,534,000
Direct labor (297,000 hrs. @ $14 per hr.) 4,158,000
Factory overhead (297,000 hrs. @ $21 per hr.) 6,237,000
Total standard cost $ 16,929,000

Actual costs incurred during the current quarter follow.

Direct materials (1,474,000 Ibs. @ $7.40 per lb.) $ 10,907,600
Direct labor (292,000 hrs. @ $12.50 per hr.) 3,650,000
Fixed factory overhead costs 3,014,700
Variable factory overhead costs 2,822,300
Total actual costs $ 20,394,600
Need help with: Compute the direct materials cost variance, including its price and quantity variances. AQ = Actual Quantity SQ = Standard Quantity AP = Actual Price SP = Standard Price

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