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Trico Company set the following standard unit costs for its single product. Direct materials (26 Ibs. @ $3.20 per Ib.) $ 83.20 Direct labor (5
Trico Company set the following standard unit costs for its single product. |
Direct materials (26 Ibs. @ $3.20 per Ib.) | $ | 83.20 |
Direct labor (5 hrs. @ $8.50 per hr.) | 42.50 | |
Factory overheadvariable (5 hrs. @ $5.50 per hr.) | 27.50 | |
Factory overheadfixed (5 hrs. @ $7.60 per hr.) | 38.00 | |
Total standard cost | $ | 191.20 |
The predetermined overhead rate is based on a planned operating volume of 80% of the productive capacity of 50,000 units per quarter. The following flexible budget information is available. |
Operating Levels | ||||||
70% | 80% | 90% | ||||
Production in units | 35,000 | 40,000 | 45,000 | |||
Standard direct labor hours | 175,000 | 200,000 | 225,000 | |||
Budgeted overhead | ||||||
Fixed factory overhead | $ | 1,520,000 | $ | 1,520,000 | $ | 1,520,000 |
Variable factory overhead | $ | 962,500 | $ | 1,100,000 | $ | 1,237,500 |
During the current quarter, the company operated at 70% of capacity and produced 35,000 units of product; actual direct labor totaled 172,400 hours. Units produced were assigned the following standard costs: |
Direct materials (910,000 Ibs. @ $3.20 per Ib.) | $ | 2,912,000 |
Direct labor (175,000 hrs. @ $8.50 per hr.) | 1,487,500 | |
Factory overhead (175,000 hrs. @ $13.10 per hr.) | 2,292,500 | |
Total standard cost | $ | 6,692,000 |
Actual costs incurred during the current quarter follow: |
Direct materials (867,000 Ibs. @ $3.47 per lb.) | $ | 3,008,490 |
Direct labor (172,400 hrs. @ $8.29 per hr.) | 1,429,196 | |
Fixed factory overhead costs | 1,472,000 | |
Variable factory overhead costs | 922,340 | |
Total actual costs | $ | 6,832,026 |
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