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

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

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Concept explainers

Variance Analysis

In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.

Standard Costing

The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.

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