| Tuna Company set the following standard unit costs for its single product. |
Tuna Company set the following standard unit costs for its single product.?? ? ? ?? Direct materials (27 Ibs. @ $4 per Ib.)?$?108.00 ?? Direct labor (8 hrs. @ $8 per hr.)? ?64.00 ?? Factory overhead—variable (8 hrs. @ $5 per hr.)? ?40.00 ?? Factory overhead—fixed (8 hrs. @ $7 per hr.)? ?56.00 ?? ???? Total standard cost?$?268.00 ?? ? ? ???? The predetermined overhead rate is based on a planned operating volume of 60% of the productive capacity of 40,000 units per quarter. The following flexible budget information is available.?? ?Operating Levels?? ??? ? ?50%? ?60%? ?70%?? Production in units? ?20,000 ? ?24,000 ? ?28,000 ?? Standard direct labor hours? ?160,000 ? ?192,000 ? ?224,000 ?? Budgeted overhead? ? ? ? ? ? ?? Fixed factory overhead?$?1,344,000 ?$?1,344,000 ?$?1,344,000 ?? Variable factory overhead?$?800,000 ?$?960,000 ?$?1,120,000 ???? During the current quarter, the company operated at 70% of capacity and produced 28,000 units of product; actual direct labor totaled 222,000 hours. Units produced were assigned the following standard costs:?? ? ? ?? Direct materials (756,000 Ibs. @ $4 per Ib.)?$?3,024,000 ?? Direct labor (224,000 hrs. @ $8 per hr.)? ?1,792,000 ?? Factory overhead (224,000 hrs. @ $12 per hr.)? ?2,688,000 ?? ???? Total standard cost?$?7,504,000 ?? ? ? ???? Actual costs incurred during the current quarter follow:?? ? ? ?? Direct materials (751,000 Ibs. @ $4.10)?$?3,079,100 ?? Direct labor (222,000 hrs. @ $7.75)? ?1,720,500 ?? Fixed factory overhead costs? ?1,968,679 ?? Variable factory overhead costs? ?1,843,019 ?? ???? Total actual costs?$?8,611,298 ?? ? ? ????? HYPERLINK “http://ezto.mhecloud.mcgraw hill.com/” o “Reference Information” ?references? ?1.?Compute the direct materials cost variance, including its price and quantity variances. (Do not round your intermediate calculations. Indicate the effect of each variance by…
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Accounting.docx