Trico Company set the following standard unit costs for its The following inform

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Trico Company set the following standard unit costs for its

The following information applies to the questions displayed below. Trico Company set the following standard unit costs for its single product. Direct materials (25 lbs.@ $4 per lb.) Direct labor (8 hrs. $8 per hr.) Factory overhead-variable (8 hrs. $5 per hr.) Factory overhead-fixed (8 hrs. $7 per hr.) 100.00 64.00 40.00 56.00 Total standard cost $260.00 The predetermined overhead rate is based on a planned operating volume of 50% of the productive capacity of 80,000 units per quarter. The following flexible budget information is available Actual costs incurred during the current quarter follow: Direct materials (1,195,000 lbs.@ $4.10 per lb.) $ 4,899,500 Direct labor (377,000 hrs. $7.75 per hr.) Fixed factory overhead costs Variable factory overhead costs Total actual costs 2,921,750 3,343,208 3,129,811 $ 14,294,269 Operating Levels Production in units Standard direct labor hours Budgeted overhead 40% 32,000 256,000 50% 40,000 320,000 60% 48,000 384,000 Fixed factory overhead Variable factory overhead $2,240,000 2,240,00O 2,240,000 $1,280,000 $1,600,00O S1,920,000 During the current quarter, the company operated at 60% of capacity and produced 48,000 units of product; actual direct labor totaled 377,000 hours. Units produced were assigned the following standard costs Direct materials (1,200,000 lbs. $4 per lb.) Direct labor (384,000 hrs. $8 per hr.) Factory overhead (384,000 hrs.@ $12 per hr.) S 4,800,000 3.072,000 4,608,000 Total standard cost $ 12,480,000

Explanation / Answer

Since the format given are not complete, I am giving the answers with complete details.

Total Material Variance = Actual Material cost - Standard Material cost = $4,899,500 - (48000 x 25 x$4) $99,500 U Material Price Variance = Actual Quantity x (Actual price - Standard Price) = 1,195,000 x ($4.10 - 4.00) $1,19,500 U Material Quantity Variance = Standard Price x (Actual qty - Standard Qty) = $4.00 x (1,195,000 - 1,200,000) -$20,000 F Total Labor Variance = Actual Labor cost - Standard Labor cost = $2,921,750 - (48000 x 8 x$8) -$1,50,250 F Labor Price Variance = Actual Hours x (Actual rate - Standard rate) = 377,000 x ($7.75 - 8.00) -$94,250 F Labor Quantity Variance = Standard Rate x (Actual hours - Standard hours) = $8.00 x (377,000 - 384,000) -$56,000 F 3. Compute the overhead variances Controllable Variance Actual Overhead $64,73,019 Budgeted Overhead $41,60,000 Controllable Variance $23,13,019 U Fixed Overhead Volume Variance Budgeted Fixed overhead $22,40,000 Fixed overhead cost applied $46,08,000 Fixed Overhead Volume Variance -$23,68,000 F

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