Chillco Corporation produces containers of frozen food. During April, Chillco pr

Question

Chillco Corporation produces containers of frozen food. During April, Chillco produced 735 cases of food and incurred the following actual costs Variable overhead Fixed overhead Actual labor cost (6,000 direct-labor hours) Actual material cost (15,500 pounds purchased and used) $ 5,900 36,600 110,400 40,300 Overhead is budgeted and applied using direct-labor hours in a standard costing system. Standard cost and annual budget information are as follows Standard Costs per Case Direct labor (8 hours at $18 per hour) Direct material (20 pounds at $2.40 per pound) Variable overhead (8 direct-labor hours at $1.50 per hour) Fixed overhead (8 direct-labor hours at $3 per hour) Total $144.00 48.00 12.00 24.00 $228.00 Annual Budget Information Variable overhead Fixed overhead Planned activity for year $120,000 $240,000 80,000 direct-labor hours

Explanation / Answer

Standard Cost Sheet PU Component Qty Rate Price Direct Material 20 2.40 48 Direct Labor 8 18.00 144 Variable OH 8 1.50 12 Fixed OH 8 3.00 24 228 Budgeted FO Monthly 20000 Actual Cost Planned Activity for Year 6666.667 Component Qty Rate Price Recovery Rate Per DLH 3.00 Direct Material 15500 2.60 40300 Direct Labor 6000 18.40 110400 Variable OH 6000 0.98 5900 Fixed OH 6000 3.00 18000 Total 174600 Revised Standard Cost (735) Component Qty Rate Price Material 14700 2.40 35280 Labor 5880 18.00 105840 VOH 5880 1.50 8820 FOH 5880 3.00 17640 Total 167580 A Material Price Variance: (Standard Cost-Actual Cost) B -5020 Material Price Variance: (SP-AP)Actual Qty Consumed -3100 A C Material Usage Variance: (SQ-AQ)SP -1920 A D Labor Price Variance: (SP-AP)Actual Hours -2400 A E Labor Eff Variance: (SH-AH)SP -2160 A F VOH Price Variance: (SP-AP)Actual Hours 3100 F G VOH Eff Variance: (SH-AH)SP -180 A H Fixed OH Budget Variance Budgeted OH 20000 Actual OH 36600 Fixed OH Budget Variance -16600 I Fixed OH Volume Variance Recovery Rate Per DLH 3.00 Actual Labor Hour 6000 Applied OH 18000 Actual OH 36600 Fixed OH Volume Variance -18600 Adverse

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