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

Direct materials (30 Ibs. @ $4 per Ib.)$120.00Direct labor (5 hrs. @ $14 per hr.)70.00Factory overheadvariable (5 hrs. @ $8 per hr.)40.00Factory overheadfixed (5 hrs. @ $10 per hr.)50.00Total standard cost$280.00

The predetermined overhead rate is based on a planned operating volume of 80% of the productive capacity of 60,000 units per quarter. The following flexible budget information is available.

Operating Levels70%80%90%Production in units42,00048,00054,000Standard direct labor hours210,000240,000270,000Budgeted overheadFixed factory overhead$2,400,000$2,400,000$2,400,000Variable factory overhead$1,680,000$1,920,000$2,160,000

During the current quarter, the company operated at 90% of capacity and produced 54,000 units of product; actual direct labor totaled 265,000 hours. Units produced were assigned the following standard costs.

Direct materials (1,620,000 Ibs. @ $4 per Ib.)$6,480,000Direct labor (270,000 hrs. @ $14 per hr.)3,780,000Factory overhead (270,000 hrs. @ $18 per hr.)4,860,000Total standard cost$15,120,000

Actual costs incurred during the current quarter follow.

Direct materials (1,615,000 Ibs. @ $4.10 per lb.)$6,621,500Direct labor (265,000 hrs. @ $13.75 per hr.)3,643,750Fixed factory overhead costs2,350,000Variable factory overhead costs2,200,000Total actual costs$14,815,250Problem 8-4A 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

2. Compute the direct labor cost variance, including its rate and efficiency variances.

AH = Actual Hours

SH = Standard Hours

AR = Actual Rate

SR = Standard Rate

3. Compute the overhead controllable and volume variances.