Problem 23-4A Computing materials, labor, and overhead variances P3 P4 Trini Company set the following standard costs per unit for its single product. $120 70 Direct materials (30 lbs. $4 per lb.) Direct labor (5 hrs. @ $14 per hr.) Variable overhead (5 hrs a $8 per hr.) Fixed overhead (5 hrs, a $10 per hr) Standard cost per unit 40 50 $280 Overhead is applied using direct labor hours. The standard overhead rate is based on a predicted activity level of 80% of the company's capacity of 60,000 units per quarter. The following additional information is available. Capacity Level 70% 80% 90% 42.000 units 210,000 hrs 48,000 units 240,000 hrs 54 000 units 270,000 hrs. Production in units) Standard direct labor hours (5 DLH/unit) Budgeted overhead (flexible budget) Fixed overhead Variable overhead $2.400,000 $1,680.000 $2,400,000 $1.920,000 $2,400,000 $2.160,000 During the current quarter, the company operated at 90% of capacity and produced 54.000 units, actual direct labor totaled 265.000 hours. Units produced were assigned the following standard costs. Direct materials (1.620,000 tbs @ $4 per lt.) Direct labor (270,000 hrs. a $14 per hr) Overhead (270,000 hrs. @ $18 per he) Standard (budgeted cost $ 6,490,000 3,780,000 4,860,000 $15 120.000 Actual costs incurred during the current quarter follow. Direct materials (1615,000 lbs. o $4.10 et lb) Direct labor (265,000 hrs. @ $1375 per hr) Fixed overhead Variable overhead $ 6,621.500 3,643,750 2,350,000 2200.000 $14.815 250 Actual cost Required 1. Compute the direct materials variance, including its price and quantity variances 2. Compute the direct labor variance, including its rate and efficiency variances 1 >