Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Trico Company set the following standard unit costs for its single product. Direct materials (30 Ibs. @ $4.80 per Ib.) $ 144.00 Direct labor (6

Trico Company set the following standard unit costs for its single product.

Direct materials (30 Ibs. @ $4.80 per Ib.) $ 144.00
Direct labor (6 hrs. @ $14 per hr.) 84.00
Factory overheadvariable (6 hrs. @ $7 per hr.) 42.00
Factory overheadfixed (6 hrs. @ $9 per hr.) 54.00
Total standard cost $ 324.00

The predetermined overhead rate is based on a planned operating volume of 80% of the productive capacity of 57,000 units per quarter. The following flexible budget information is available.

Operating Levels
70% 80% 90%
Production in units 39,900 45,600 51,300
Standard direct labor hours 239,400 273,600 307,800
Budgeted overhead
Fixed factory overhead $ 2,462,400 $ 2,462,400 $ 2,462,400
Variable factory overhead $ 1,675,800 $ 1,915,200 $ 2,154,600

During the current quarter, the company operated at 90% of capacity and produced 51,300 units of product; actual direct labor totaled 304,800 hours. Units produced were assigned the following standard costs.

Direct materials (1,539,000 Ibs. @ $4.80 per Ib.) $ 7,387,200
Direct labor (307,800 hrs. @ $14 per hr.) 4,309,200
Factory overhead (307,800 hrs. @ $16 per hr.) 4,924,800
Total standard cost $ 16,621,200

Actual costs incurred during the current quarter follow.

Direct materials (1,519,000 Ibs. @ $7.30 per lb.) $ 11,088,700
Direct labor (304,800 hrs. @ $13.00 per hr.) 3,962,400
Fixed factory overhead costs 2,337,000
Variable factory overhead costs 2,187,800
Total actual costs $ 19,575,900

image text in transcribed

image text in transcribed

image text in transcribed

image text in transcribed

Required: . Compute the direct materials cost varlance, Including its price and quantity variances Actual Cost Standard Cost Actual Standard price Standard Standard price Actual price Actual quantity 1,519.000 4.80 1,519.000 S 7.30 4.80 11,088,700 7.291.200 3,797.500 Direct materials price variance Direct materials quantity variance Total direct materials variance 3,707.500 2. Compute the direct labor cost variance, Including its rate and efficiency variances Actual Cost Standard Cost Actual hours Standare rate Standard hours Standard rate Actual rate Actual hours Direct labor rate variance Direct labor efficiency variance Total direct labor variance 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

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Managerial Accounting

Authors: McGraw Hill Education

14th Edition

1121182518, 978-1121182516

More Books

Students also viewed these Accounting questions