The predetermined overhead rate is based on a planned operating volume of 60% of

Question

   

  

The predetermined overhead rate is based on a planned operating volume of 60% of the productive capacity of 50,000 units per quarter. The following flexible budget information is available.

  

  

During the current quarter, the company operated at 70% of capacity and produced 35,000 units of product; actual direct labor totaled 203,000 hours. Units produced were assigned the following standard costs:

  

  

    

Trico Company set the following standard unit costs for its single product. Required 1. Compute the direct materials cost variance, including its price and quantity variances. Actual Cost Standard Cost

Explanation / Answer

Direct material cost variance = Standard cost - Actual cost

= $3,150,000 - 3,239,500

= $89,500 U

Direct material price variance = (SP - AP) x AQ

= ($3.00 - $3.10) x 1,045,000

= $104500 U

Direct material efficiency variance = (SQ - AQ) x SP

= (1,050,000 - 1,045,000) x $3.00

= $15000 F

Related Questions

Navigate

• Browse (All)
• Browse T
• Subjects

---

---

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