Ikon Tire Co. manufactures automobile tires. Standard costs and actual costs for direct materials, direct labor, and factory overhead incurred for the manufacture of 36,000 tires were as follows:

Each tire requires 0.50 hour of direct labor.

Instructions
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
(c) Variable factory overhead controllable variance, the fixed factory overhead volume variance, and total factory overhead costvariance.

Transcribed Image Text:

Standard Costs Actual Costs Direct materials Direct labor Factory overhead 72,000 pounds at $4.50 18,000 hours at $18.00 Rates per direct labor hour, based on 100% of normal capacity of 20,000 direct labor hours: 73,100 pounds at $4.80 18,500 hours at $17.88 Variable cost, $2.40 Fixed cost, $3.75 $42,870 variable cost $75,000 fixed cost