SureGrip Tire Co. manufactures automobile tires. Standard costs and actual costs for direct materials, direct labor, and factory overhead incurred for the manufacture of 39,000 tires were as follows:
|
Standard Costs |
Actual Costs |
Direct materials |
68,000 pounds at $4.80 |
72,100 pounds at $5.20 |
Direct labor |
15,600 hours at $16.00 |
15,400 hours at $15.70 |
|
|
|
Factory overhead |
Rates per direct labor hour, |
|
|
based on 100% of normal |
|
|
capacity of 21,000 direct |
|
|
labor hours: |
|
|
Variable cost, $2.70 |
$41,650 variable cost |
|
Fixed cost, $3.65 |
$76,650 fixed cost |
Each tire requires 0.40 hour of direct labor.
Instructions
Determine (a) the price variance, quantity variance, and total direct materials cost variance; (b) the rate variance, time variance, and total direct labor cost variance; and (c) variable factory overhead controllable variance, the fixed factory overhead volume variance, and total factory overhead cost variance.