Trico Company set the following standard unit costs for its single product. Dire

Question

Trico Company set the following standard unit costs for its single product. Direct materials (28 lbs. @ $3.20 per lb.) Direct labor (5 hrs. @ 58.50 per hr.) Factory overhead-variable (5 hrs. @ $5.50 per hr.) Factory overhead-fixed (5 hrs. $7.10 per hr.) $ 89.60 42.50 27.50 Total standard cost $195.10 The predetermined overhead rate is based on a planned operating volume of 80% of the productive capacity of 57,000 units per quarter. The following flexible budget information is available Operating Levels Production in units Standard direct labor hours Budgeted overhead 80% 45,600 199,500 228,000 256,500 70% 39,900 90% 51,300 Fixed factory overhead Variable factory overhead $1,618,800 $1,618,800 $1,618,800 $ 1,097,250 $1,254,000 $1,410,750 During the current quarter, the company operated at 70% of capacity and produced 39,900 units of product; actual direct labor totaled 197,400 hours. Units produced were assigned the following standard costs: Direct materials (1,117,200 lbs. $3.20 per lb3,575,040 Direct labor (199,500 hrs.@ $8.50 per hr.) Factory overhead (199,500 hrs. $12.60 per hr.) 1,695,750 2,513,700 Total standard cost $7,784,490 Actual costs incurred during the current quarter follow Direct materials (1,077,200 lbs. $3.41 per lb.) Direct labor (197,400 hrs. @ $8.28 per hr.) Fixed factory overhead costs Variable factory overhead costs 3,673,252 1,634,472 1,556,800 1,056,090 Total actual costs $ 7,920,614

Explanation / Answer

Actual Variable OH cost Fkexible Budget Standard cost AH X AVR AH X SVR SH X SVR 197400 X $5.35 197400 X 5.5 199500 X 5.5 $1,056,090 1085700 1097250 $29,610 F 11550 F Std cost per unit=1097250/199500 5.50 Variable ovehead spending $29,610 F Variable overhead efficiency variance 11550 F Total variable overhead variance $41,160 F Actual Fixed OH cost Budgetd overjhead Standard cost (applied) AH X AFR SH X SFR 197400 X $7.89 199500 X 7.1 $1,556,800 1618800 1416450 $62,000 F 202350 F SR applied=1618800/228000 7.10 Fixed ovehead spending $62,000 F Fixed overhead volume variance 202350 F Total fixed overhead cost varaince $264,350 F ans Variable ovehead spending $29,610 F Variable overhead efficiency variance $11,550 F Fixed ovehead spending $62,000 F Total overhead controllable variance $103,160 F

Related Questions

Navigate

• Browse (All)
• Browse T
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.