Connect 23 5-7
Connect 23 5-7
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Connect 23 5-7
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Trico Company set the following standard unit costs for its single product.
| Direct materials (25 Ibs. @ $4.00 per Ib.) | $ | 100.00 |
| Direct labor (8 hrs. @ $8.00 per hr.) | 64.00 | |
| Factory overhead—variable (8 hrs. @ $5.00 per hr.) | 40.00 | |
| Factory overhead—fixed (8 hrs. @ $7.00 per hr.) | 56.00 | |
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| Total standard cost | $ | 260.00 |
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| The predetermined overhead rate is based on a planned operating volume of 70% of the productive capacity of 60,000 units per quarter. The following flexible budget information is available. |
| Operating Levels | ||||||
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| 60% | 70% | 80% | ||||
| Production in units | 36,000 | 42,000 | 48,000 | |||
| Standard direct labor hours | 288,000 | 336,000 | 384,000 | |||
| Budgeted overhead | ||||||
| Fixed factory overhead | $ | 2,352,000 | $ | 2,352,000 | $ | 2,352,000 |
| Variable factory overhead | $ | 1,440,000 | $ | 1,680,000 | $ | 1,920,000 |
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| During the current quarter, the company operated at 80% of capacity and produced 48,000 units of product; actual direct labor totaled 377,000 hours. Units produced were assigned the following standard costs: |
| Direct materials (1,200,000 Ibs. @ $4.00 per Ib.) | $ | 4,800,000 |
| Direct labor (384,000 hrs. @ $8.00 per hr.) | 3,072,000 | |
| Factory overhead (384,000 hrs. @ $12.00 per hr.) | 4,608,000 | |
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| Total standard cost | $ | 12,480,000 |
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| Actual costs incurred during the current quarter follow: |
| Direct materials (1,195,000 Ibs. @ $4.10) | $ | 4,899,500 |
| Direct labor (377,000 hrs. @ $7.75) | 2,921,750 | |
| Fixed factory overhead costs | 3,343,208 | |
| Variable factory overhead costs | 3,129,811 | |
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| Total actual costs | $ | 14,294,269 |
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rev: 01_19_2015_QC_CS-3499
5.
Award: 10 out of 10.00 points
| Required: | |
| 1. | Compute the direct materials cost variance, including its price and quantity variances.(Round actual |
