Trico Company set the following standard unit costs for its single product. Direct materials (26 Ibs 1 answer below »
Trico Company set the following standard unit costs for its single product.
Direct materials (26 Ibs. @ $4.00 per Ib.) $ 104.00 Direct labor (8 hrs. @ $8.00 per hr.) 64.00 Factory overheadAc??variable (8 hrs. @ $5.00 per hr.) 40.00 Factory overheadAc??fixed (8 hrs. @ $7.00 per hr.) 56.00 Total standard cost $ 264.00
The predetermined overhead rate is based on a planned operating volume of 60% of the productive capacity of 60,000 units per quarter. The following flexible budget information is available.
Operating Levels 50% 60% 70% Production in units 30,000 36,000 42,000 Standard direct labor hours 240,000 288,000 336,000 Budgeted overhead Fixed factory overhead $ 2,016,000 $ 2,016,000 $ 2,016,000 Variable factory overhead $ 1,200,000 $ 1,440,000 $ 1,680,000
During the current quarter, the company operated at 70% of capacity and produced 42,000 units of product; actual direct labor totaled 333,000 hours. Units produced were assigned the following standard costs:
Direct materials (1,092,000 Ibs. @ $4.00 per Ib.) $ 4,368,000 Direct labor (336,000 hrs. @ $8.00 per hr.) 2,688,000 Factory overhead (336,000 hrs. @ $12.00 per hr.) 4,032,000 Total standard cost $ 11,088,000
Actual costs incurred during the current quarter follow:
Direct materials (1,087,000 Ibs. @ $4.10) $ 4,456,700 Direct labor (333,000 hrs. @ $7.75) 2,580,750 Fixed factory overhead costs 2,953,019 Variable factory overhead costs 2,764,528 Total actual costs $ 12,754,997
rev: 01_19_2015_QC_CS-3499
5.
value:
10.00 points Required: 1.
Compute the direct materials cost variance, including its price and quantity variances.(Round actual price to 2 decimal places.)
