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Chillco Corporation produces containers of frozen food. During April, Chillco produced 780 cases of food and incurred the following actual costs.
Variable overhead$6,800
Fixed overhead7,900
Actual labor cost (3,500 direct-labor hours)57,050
Actual material cost (21,000 pounds purchased and used)42,000
Overhead is budgeted and applied using direct-labor hours in a standard costing system. Standard cost and annual budget information are as follows:
Standard Costs per Case
Direct labor (3 hours at $16 per hour)$48.00
Direct material (25 pounds at $1.70 per pound)42.50
Variable overhead (3 direct-labor hours at $2.00 per hour)6.00
Fixed overhead (3 direct-labor hours at $2 per hour)6.00
Total$102.50
Annual Budget Information
Variable overhead$60,000
Fixed overhead$60,000
Planned activity for year30,000direct-labor hours
Direct-material price variance
Direct-material purchase price variance
Direct-material quantity variance
Direct-labor rate variance
Direct-labor efficiency variance
Variable-overhead spending variance
Variable-overhead efficiency variance
Fixed-overhead budget variance
Fixed-overhead volume variance
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