k 0 Required information The following information applies to the questions disp
ID: 2516636 • Letter: K
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k 0 Required information The following information applies to the questions displayed below) Trico Company set the following standard unit costs for its single product. 147.00 64.00 Direct materials (30 Ibs. $4.90 per Ib. Direct labor (4 hrs. $16 per hr.) Tactory overhead-variable (4 hra. $6 per hr. Faetory overhead-fixed [4 hra. e $10 per hr.) Total standard cost 4-00 275.00 The predetermined overhead rate is based on a planned operating volume of 80% of the productive capacity of S3000 units per quarter. The following flexible budget information is available. 70% 80% 111,901 148.400 169,600 190,0 890,4OD $,017,600 ,144.8 Prodaction in unies Standard direct labor hours Budgeted overhead $1,696,000 1,696,000 1,696,000 Fixed factory overhead Variable factory overhead During the current quarter, the company operated at 90% of capacity and produced 17700 units of product actual dect labor totaled 185,800 hours. Units produced were assigned the following standard costs Direet materials (,431,000 Ibs. $4.90 per MacBook Air 3 4 0Explanation / Answer
1) Direct Materials Price Variance = (SP - AP)*AQ
= ($4.90-$7.70)*1,412,000 = ($3,953,600) Unfavorable
Direct Materials Quantity Variance = (SQ - AQ)*SP
= (1,431,000 - 1,412,000)*$4.90 = $93,100 Favorable
Direct Materials Cost Variance = Standard Cost - Actual Cost
= $7,011,900-$10,872,400 = (3,860,500) Unfavorable
2) Direct Labor Rate Variance = (SR - AR)*AH
= ($16.00-$11.00)*185,800 = $929,000 Favorable
Direct Labor Efficiency Variance = (SH - AH)*SR
= (190,800 - 185,800)*$16.00 = $80,000 Favorable
Direct Labor Cost Variance = Standard Cost - Actual Cost
= $3,052,800-$2,043,800 = $1,009,000 Favorable
3) Actual Overhead = $1,318,500+$1,282,700 = $2,601,200
Budgeted Overhead (80% capacity) = $1,696,000+$1,017,600 = $2,713,600
Overhead Controllable Variance = Budgeted Overhead - Actual Overhead
= $2,713,600 - $2,601,200 = $112,400 Favorable
Budgeted Fixed Overhead = $1,696,000
Fixed Overhead Cost Applied = Actual Labor Hours*Standard rate per hour
= 185,800 hrs*$10 per hour = $1,858,000
Fixed Overhead Volume Variance = Fixed Overhead Cost Applied - Budgeted Fixed Overhead
= $1,858,000 - $1,696,000 = $162,000 Favorable
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