Route 66 Tire Co. manufactures automobile tires. Standard costs and actual costs for direct materials, direct labor, and factory overhead incurred for the manufacture of 10,000 tires were as follows:

Each tire requires 0.40 hour of direct labor.

Instruction

Determine

(a) The price variance, quantity variance, and total direct materials cost variance;

(b) The rate variance, time variance, and total direct labor cost variance; and

(c) Appendix: variable factory overhead controllable variance, the fixed factory overhead volume variance, and total factory overhead cost variance.

Transcribed Image Text:

Standard Costs 85,000 lbs. at $6.25 4,000 hrs. at $20.80 Rates per direct labor hr., based on 100% of normal capacity of 5,000 direct labor hrs.: Variable cost, $2.90 Fixed cost, $11.40 Actual Costs Direct materials Direct labor Factory overhead 83,800 Ibs. at $6.17 4,450 hrs. at $21.00 $11,375 variable cost $57,000 fixed cost