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 (30 Ibs. $4.80 per Ib. Direct labor (8 hrs. e $16 per hr. Factory overhead-variable (8 hrs $9 per hr. Factory overhead-fixed (8 hrs. $12 per hr.) Total standard cost $144.00 128.00 72.00 96.00 $440.00 The predetermined overhead rate is based on a planned operating volume of 80% of the productive capacity of 59,000 units per quarter. The following flexible budget information is available 70% 41,300 330,400 erating Levels 80% 47,200 377,600 90% Production in units Standard direct labor hours Budgeted overhead 53,100 424,800 Fixed factory overheacd Variable factory overhead $4,531,200 $4,531,200 $4,531,200 $2,973,600 $3,398,400 $3,823,200 During the current quarter, the company operated at 90% of capacity and produced 53,100 units of product, actual direct labor totaled 420,800 hours. Units produced were assigned the following standard costs. Direct materials (1,593,000 Ibs. $4.80 per Ib. Direct labor (424, 800 hrs $16 per hr.) Factory overhead (424,800 hrs. $21 per hr.) Total standard cost 7,646,400 6,796,800 8,920,800 $23,364,000 Actual costs incurred during the current quarter follow Direct materials (1,582,000 Ibs. 8 $5.90 per lb.) Direct labor (420, 800 hrs. $12.50 per hr.) Fixed factory overhead costs Variable factory overhead costs Total actual costs $ 9,333,800 5, 260,000 4,297,600 4,023,200 $22,914,600

Explanation / Answer

Req 2: Actual cost Standard cost AH * AR AH * SR SH * SR 420800 * 16 420800 * 16 424800 * 16 6732800 6732800 6796800 0 64000 Labour rate variance (AH*SR-AH*AR) 0 Labour Efficiency variance(SR*SH-SR*AH) 64000 Fav Req 3: Controllable variance Actual Overheads 8320800 Budgeted Overheads 8354400 Controllable variance 33600 Fav Fixed overhead volume variance Budgeted Fixed Overheads 4531200 Fixed overheads cost applied 5097600 (53100 units@96 per unit) Fixed overhead volume variance 566400 Unfav

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