Required information[The following information applies to the questions displayed below.]Trini Company set the following standard costs per unit for its single productDirect materials (30 pounds @ $4.40 per pound)Direct labor (6 hours @ $14 per hour)Variable overhead (6 hours @ $9 per hour)Fixed overhead (6 hours @ $12 per hour)Standard cost per unitOverhead is applied using direct labor hours. The standard overhead rate is based on a predicted activity level of 80% ofthe company's capacity of 55,000 units per quarter. The following additional information is available.Operating LevelsProduction (in units)Standard direct labor hours (6 DLH/unit)Budgeted overhead (flexible budget)Fixed overheadVariable overhead$ 132.0084.0054.0072.00$342.00Direct materials (1,485,000 pounds @ $4.40 per pound)Direct labor (297,000 hours @ $14 per hour)Overhead (297,000 hours @ $21 per hour)Standard (budgeted) costActual costs incurred during the current quarter follow.Direct materials (1,474,000 pounds @ $7.40 per pound)Direct labor (292,000 hours @ $12.50 per hour)Fixed overheadVariable overheadActual cost70%38,500231,000$ 3,168,000$ 2,079,00080%44,000264,000$ 3,168,000$ 2,376,000During the current quarter, the company operated at 90% of capacity and produced 49,500 units; actual direct labortotaled 292,000 hours. Units produced were assigned the following standard costs.$ 6,534,0004,158,0006,237,000$ 16,929,000$ 10,907,6003,650,0003,014,7002,822,300$ 20,394,60090%49,500297,000Required:1. Compute the direct materials variance, including its price and quantity variances.2. Compute the direct labor variance, including its rate and efficiency variances.3. Compute the overhead controllable and volume variances.$ 3,168,000$ 2,673,000

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Description: Required information[The following information applies to the questions displayed below.]Trini Company set the following standard costs per unit for its single productDirect materials (30 pounds @ $4.40 per pound)Direct labor (6 hours @ $14 per hour

Direct material price variance = (SP - AP) * AQ Direct material quantity variance = (SQ - AQ) * SP…

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Trini Company set the following standard costs per unit for its single product Direct materials (30 pounds @ $4.40 per pound) Direct labor (6 hours@ $14 per hour) Variable overhead (6 hours @ $9 per hour) Fixed overhead (6 hours@ $12 per hour) Standard cost per unit $ 132.00 84.00 54.00 72.00 $ 342.00 Overhead is applied using direct labor hours. The standard overhead rate is based on a predicted activity level of 80% the company's capacity of 55,000 units per quarter. The following additional information is available. Production (in units) Standard direct labor hours (6 DLH/unit) Budgeted overhead (flexible budget) Fixed overhead Variable overhead 70% 38,500 231,000 $ 3,168,000 $ 2,079,000 Operating Levels 80% 44,000 264,000 $ 3,168,000 $ 2,376,000 90% 49,500 297,000 $ 3,168,000 $ 2,673,000

Trini Company set the following standard costs per unit for its single product Direct materials (30 pounds @ $4.40 per pound) Direct labor (6 hours@ $14 per hour) Variable overhead (6 hours @ $9 per hour) Fixed overhead (6 hours@ $12 per hour) Standard cost per unit $ 132.00 84.00 54.00 72.00 $ 342.00 Overhead is applied using direct labor hours. The standard overhead rate is based on a predicted activity level of 80% the company's capacity of 55,000 units per quarter. The following additional information is available. Production (in units) Standard direct labor hours (6 DLH/unit) Budgeted overhead (flexible budget) Fixed overhead Variable overhead 70% 38,500 231,000 $ 3,168,000 $ 2,079,000 Operating Levels 80% 44,000 264,000 $ 3,168,000 $ 2,376,000 90% 49,500 297,000 $ 3,168,000 $ 2,673,000

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter4: Activity-based Costing

Section: Chapter Questions

Problem 3CE: Lansing. Inc., provided the following data for its two producing departments: Machine hours are used...

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