Th e following information applies to the questions displayed below . Trico Comp

Question

Th e following information applies to the questions displayed below . Trico Company set the following standard unit costs for its single product. Direct materials (30 Ibs. $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 50.00 $ 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 rating Levels 70% 80% 90% Production in units Standard direct labor hour:s Budgeted overhead 42,000 210,000 48,000 240,000 54,000 270,000 Fixed factory overhead Variable factory 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 of product, actual direct labor totaled 265,000 hours. Units produced were assigned the following standard costs Direct materials (1,620,000 Ibs. $4 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 4,860,000 $15,120,000 Actual costs incurred during the current quarter follow Direct materials (1,615,000 Ibs. $4.10 per lb.) Direct labor (265,000 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

Explanation / Answer

Part A

8.30

(2200000/265000)

80000

(2200000-2120000)

40000

(2160000 - 2120000)

Part B

8.87

(2350000/265000)

50000

(2400000-2350000)

300000

(2700000-2400000)

Part c

Actual variable OH cost   Flexible budget Standard cost (VOH applied) AH x AVR AH x SVR SH x SVR 265000 x

8.30

(2200000/265000)

265000 x 8 270000 X 8 2200000 2120000 2160000

80000

(2200000-2120000)

40000

(2160000 - 2120000)

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