9 Check Required information Use the following information for the Problems belo

Question

9 Check Required information Use the following information for the Problems below. [The following information applies to the questions displayed below Trico Company set the following standard unit costs for its single product. 2 ints 8 023603 pped Direct materials (30 Ibs. $5.10 per Ib. Direct labor (8 hrs. $14 per hr.) Factory overhead-variable (8 hrs. $6 per hr.) Factory overhead-fixed (8 hrs. 12 per hr.) Total standard cost $ 153.0e 112.00 48.00 96.00 s 409.00 Print es The edetermined over ead rates based on a plan redoperating volume of 80% of the productive capacityof 66,000 units per quarter The following flexible bucget information is available Operating Levels Production in units Standard direct labor hours 70% 46,200 80% 52,800 422,400 59, 400 475,20o

Explanation / Answer

1. Computation of direct material cost variance.

Material variance = (AQ x SP) - (AQ x AP)

= (1387,000 x 5.10) - (1387000 x 6.70)

= 201800

Material quantity variance = (AQ x SP) - (SQ x SP)

= (1387000 x 5.10) - (1782000 x 5.10)  

= -2014500

2. Computation of direct labour cost variance including rate and efficiency

Direct labour cost variance = (SH x SR) - (AH x AR)

= (475200 x 14) - (369400 x 11.60)

= 6652800 - 4285040

= 2367760

Direct labour rate variance = (AH x SR) - (AH x AR)

   = (369400 x 14) - (369400 x 11.60)

= 5171600 - 4285040

= 886560

Direct labour efficiency variance = (AH x SR) - (SH x SR)

= (369400 x 14) - (475200 x 14)

= 5171600 - 6652800

= -1481200

3. Computation of overhead controllable and volume variance

Actual OH (3196500+3466700) 6663200 Budgeted allowance based on standard hours allowed 475200 overhead controlled variance (6663200-475200) 6188000 overhead volume variance (5068800-3196500) 1872300

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