Trico Company set the following standard unit costs for its single product. Direct materials (30 lbs....
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Trico Company set the following standard unit costs for its single product. Direct materials (30 lbs. @ $4 per lb.) 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 Production in units Standard direct labor hours Budgeted overhead Fixed factory overhead Variable factory overhead 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% 42,000 210,000 Direct materials (1,620,000 lbs. @ $4 per lb.) Direct labor (270,000 hrs. @ $14 per hr.) Factory overhead (270,000 hrs. @ $18 per hr.) Total standard cost $ 120.00 70.00 40.00 50.00 Actual costs incurred during the current quarter follow: Direct materials (1,615,000 lbs. @ $4.10 per lb.) Direct labor (265,000 hrs. @ $13.75 per hr.) Fixed factory overhead costs Variable factory overhead costs Total actual costs $280.00 $2,400,000 $2,400,000 $2,400,000 $1,680,000 $1,920,000 $2,160,000 80% 48,000 240,000 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: $ 6,480,000 3,780,000 4,860,000 90% 54,000 270,000 $ 15,120,000 $ 6,621,500 3,643,750 2,350,000 2,200,000 $ 14,815,250 Required: 1. Compute the direct materials cost variance, including its price and quantity variances. Actual Cost $ 0 $ 0 0 $ 0 Standard Cost 2. Compute the direct labor cost variance, including its rate and efficiency variances. Actual Cost $ 0 $ 0 0 $ 0 Standard Cost 3. Compute the overhead controllable and volume variances. Controllable Variance Actual overhead Budgeted overhead Controllable variance Fixed overhead volume variance Budgeted fixed overhead Fixed overhead cost applied Fixed overhead volume variance Trico Company set the following standard unit costs for its single product. Direct materials (30 lbs. @ $4 per lb.) 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 Production in units Standard direct labor hours Budgeted overhead Fixed factory overhead Variable factory overhead 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% 42,000 210,000 Direct materials (1,620,000 lbs. @ $4 per lb.) Direct labor (270,000 hrs. @ $14 per hr.) Factory overhead (270,000 hrs. @ $18 per hr.) Total standard cost $ 120.00 70.00 40.00 50.00 Actual costs incurred during the current quarter follow: Direct materials (1,615,000 lbs. @ $4.10 per lb.) Direct labor (265,000 hrs. @ $13.75 per hr.) Fixed factory overhead costs Variable factory overhead costs Total actual costs $280.00 $2,400,000 $2,400,000 $2,400,000 $1,680,000 $1,920,000 $2,160,000 80% 48,000 240,000 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: $ 6,480,000 3,780,000 4,860,000 90% 54,000 270,000 $ 15,120,000 $ 6,621,500 3,643,750 2,350,000 2,200,000 $ 14,815,250 Required: 1. Compute the direct materials cost variance, including its price and quantity variances. Actual Cost $ 0 $ 0 0 $ 0 Standard Cost 2. Compute the direct labor cost variance, including its rate and efficiency variances. Actual Cost $ 0 $ 0 0 $ 0 Standard Cost 3. Compute the overhead controllable and volume variances. Controllable Variance Actual overhead Budgeted overhead Controllable variance Fixed overhead volume variance Budgeted fixed overhead Fixed overhead cost applied Fixed overhead volume variance
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Fundamental accounting principle
ISBN: 978-0078025587
21st edition
Authors: John J. Wild, Ken W. Shaw, Barbara Chiappetta
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