Question
Trico Company set the following standard unit costs for its single product. Direct materials (30 Ibs. @ $5.10 per Ib.) $ 153.00 Direct labor (4
Trico Company set the following standard unit costs for its single product.
Direct materials (30 Ibs. @ $5.10 per Ib.) | $ | 153.00 |
Direct labor (4 hrs. @ $15 per hr.) | 60.00 | |
Factory overheadvariable (4 hrs. @ $6 per hr.) | 24.00 | |
Factory overheadfixed (4 hrs. @ $10 per hr.) | 40.00 | |
Total standard cost | $ | 277.00 |
The predetermined overhead rate is based on a planned operating volume of 80% of the productive capacity of 68,000 units per quarter. The following flexible budget information is available.
Operating Levels | ||||||
70% | 80% | 90% | ||||
Production in units | 47,600 | 54,400 | 61,200 | |||
Standard direct labor hours | 190,400 | 217,600 | 244,800 | |||
Budgeted overhead | ||||||
Fixed factory overhead | $ | 2,176,000 | $ | 2,176,000 | $ | 2,176,000 |
Variable factory overhead | $ | 1,142,400 | $ | 1,305,600 | $ | 1,468,800 |
During the current quarter, the company operated at 90% of capacity and produced 61,200 units of product; actual direct labor totaled 238,800 hours. Units produced were assigned the following standard costs.
Direct materials (1,836,000 Ibs. @ $5.10 per Ib.) | $ | 9,363,600 |
Direct labor (244,800 hrs. @ $15 per hr.) | 3,672,000 | |
Factory overhead (244,800 hrs. @ $16 per hr.) | 3,916,800 | |
Total standard cost | $ | 16,952,400 |
Actual costs incurred during the current quarter follow.
Direct materials (1,822,000 Ibs. @ $6.70 per lb.) | $ | 12,207,400 |
Direct labor (238,800 hrs. @ $12.10 per hr.) | 2,889,480 | |
Fixed factory overhead costs | 1,942,700 | |
Variable factory overhead costs | 1,668,700 | |
Total actual costs | $ | 18,708,280 |
(a) Compute the variable overhead spending and efficiency variances. (Round "cost per unit" and "rate per hour" answers to 2 decimal places.)
(b) Compute the fixed overhead spending and volume variances. (Round "cost per unit" and "rate per hour" answers to 2 decimal places.) (c) Compute the total overhead controllable variance.
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