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Use the following information for the Problems below

Accounting

Use the following information for the Problems below.

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

 

      Direct materials (30 Ibs. @ $5.10 per Ib.) $ 153.00

Direct labor (8 hrs. @ $14 per hr.)   112.00

Factory overhead—Variable (8 hrs. @ $6 per hr.)   48.00

Factory overhead—Fixed (8 hrs. @ $12 per hr.)   96.00

Total standard cost $ 409.00

The predetermined overhead rate is based on a planned operating volume of 80% of the productive capacity of 52,000 units per quarter. The following flexible budget information is available.

 

  Operating Levels     70%   80%   90%

Production in units   36,400   41,600   46,800

Standard direct labor hours   291,200   332,800   374,400

Budgeted overhead          

  Fixed factory overhead $ 3,993,600 $ 3,993,600 $ 3,993,600

Variable factory overhead $ 1,747,200 $ 1,996,800 $ 2,246,400

During the current quarter, the company operated at 90% of capacity and produced 46,800 units of product; actual direct labor totaled 370,400 hours. Units produced were assigned the following standard costs.

 

      Direct materials (1,404,000 Ibs. @ $5.10 per Ib.) $ 7,160,400

Direct labor (374,400 hrs. @ $14 per hr.)   5,241,600

Factory overhead (374,400 hrs. @ $18 per hr.)   6,739,200

Total standard cost $ 19,141,200

Actual costs incurred during the current quarter follow.

Direct materials (1,385,000 Ibs. @ $6.70 per lb.) $ 9,279,500

Direct labor (370,400 hrs. @ $11.50 per hr.)   4,259,600

Fixed factory overhead costs   3,196,600

Variable factory overhead costs   3,016,800

Total actual costs $ 19,752,500

Problem 08-4A Computing materials, labor, and overhead variances LO P3, P4

Required:

1) Compute the direct materials cost variance, including its price and quantity variances.

2) Compute the direct labor cost variance, including its rate and efficiency variances.

3) Compute the overhead controllable and volume variances.

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