Trico Company set the following standard unit costs for its single product. Direct materials (30 lbs. Direct nater $4 per Ib.) Direct labor (5 hrs. @ $14 per hr.) Factory overhead-variable (5 hrs. @ $8 per hr.) Factory overhead-fixed (5 hrs. @ $10 per hr.) Total standard cost $ 120.00 70.00 40.00 50.ee $ 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 Levels 70% sex 42,00 48,089 210,eee 240,eee 90% 54,000 270,eee Production in units Standard direct labor hours Budgeted overhead Fixed factory overhead Variable factory overhead $2,400,eee $2,400,000 $2,400,eee $1,689,880 $1,920,000 $2,160,eee Springfield Rifles 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 lbs. @ 54 per Ib.) Direct labor (270,000 hrs. $14 per hr.) Factory overhead (270,000 hrs. $18 per hr.) Total standard cost $ 6,480,000 3,780,000 4.850.000 $15,120,000 Actual costs incurred during the current quarter follow. Direct materials (1,620,eee Ibs. $4 per Ib.) Direct labor (270, eee hrs. @ $14 per hr.) Factory overhead (270, eee hrs. $18 per hr.) Total standard cost $ 6,480,000 3,780,000 4,860,000 $15, 120,000 Actual costs incurred during the current quarter follow. Direct materials (1,615,000 lbs. 54.10 per lb.) Direct labor (265, eee hrs. $13.75 per hr.) Fixed factory overhead costs Variable factory overhead costs Total actual costs $ 6,621,500 3,643,750 2,350,000 2,200,000 $14,815,250 Problem 21-4A Computation of materials, labor, and overhead variances LO P2, P3 Springfield Rifles 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 1,615.000 AO 1.615.000 SO 1.620,000 Required information Actual UOST Standard cost SP SO AQ 1,615,000 AQ 1.615,000 PS 4.10 $ 4.00 1.620,000 6,621,500 6,460,000 6,480,000 S161,500 $ 20,000 Direct materials price variance 161,500Unfavorable Direct materials quantity variance $ 20,000 Favorable Total direct materials variance 141,500) Unfavorable nces Springfield Rifles 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 Actual Cost Standard Cost Required information AR = Actual Rate SR = Standard Rate Actual Cost Standard Cost $ 0 $ 0 Springfield Rifles 3. Compute the overhead controllable and volume variances Controllable Variance Actual overhead Budgeted overhead Controllable variance (n) Compute the variable overhead spending and efficiency variances. (Round "cost per unit" and "rate per hour" answers to 2 decimal places.) AH = Actual Hours SH = Standard Hours AVR - Actual Variable Rate SVR Standard Variable Rate Actual Variable OH Cost Flexible Budget Standard Cost (VOH applied) AH SVR SH SVR 265.000 265.000 $ 14.00 270.000 3,643,750 3.710.000 3,780,000 $ 66.250 $ 70,000 $ 65,250 70,000 Springfield Rifles (b) Compute the fixed overhead spending and volume variances (Round "cost per unit" and "rate per hour" answers to 2 decimal places.) ALL Act Hanne (b) Compute the fixed overhead spending and volume variances. (Round "cost per unit" and "rate per hour answers to 2 decimal places.) AH = Actual Hours SH - Standard Hours AFR - Actual Fixed Rate SER - Standard Fixed Rate Actual Fixed OH Cost Budgeted Overhead Standard Cost (FOH applied) Springfield Rifles (c) Compute the total overhead controllable variance. Overhead Controllable Variance Total overhead controllable variance ences Springfield Rifles
