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 51,000 units per quarter. The following flexible budget information is available.

	Operating Levels
		70%		80%		90%
Production in units		35,700		40,800		45,900
Standard direct labor hours		249,900		285,600		321,300
Budgeted overhead
Fixed factory overhead	$	2,570,400	$	2,570,400	$	2,570,400
Variable factory overhead	$	1,749,300	$	1,999,200	$	2,249,100

During the current quarter, the company operated at 90% of capacity and produced 45,900 units of product; actual direct labor totaled 317,300 hours. Units produced were assigned the following standard costs.

Direct materials (1,377,000 Ibs. @ $5.00 per Ib.)	$	6,885,000
Direct labor (321,300 hrs. @ $14 per hr.)		4,498,200
Factory overhead (321,300 hrs. @ $16 per hr.)		5,140,800
Total standard cost	$	16,524,000

Actual costs incurred during the current quarter follow.

Direct materials (1,358,000 Ibs. @ $7.80 per lb.)	$	10,592,400
Direct labor (317,300 hrs. @ $11.00 per hr.)		3,490,300
Fixed factory overhead costs		2,448,500
Variable factory overhead costs		2,292,300
Total actual costs	$	18,823,500

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

Actual Cost								Standard Cost

2Compute the direct labor cost variance, including its rate and efficiency variances. AH = Actual Hours SH = Standard Hours AR = Actual Rate SR = Standard Rate

Actual Cost								Standard Cost

3. Compute the overhead controllable and volume variances.

Controllable Variance
Actual overhead
Budgeted overhead
Controllable variance

Fixed overhead volume variance
Budgeted fixed overhead
Fixed overhead cost applied
Fixed overhead volume variance