MA60 Problem: Variance Analysis - Trombone Ltd.

MA60 Problem: Variance Analysis - Trombone Ltd.

Trombone Ltd. (TL) uses standard costing. At the beginning of the year, TL budgeted variableoverhead to be $341,000, based on total direct labour hours of 110,000. Total direct labour costswere estimated to be $1,485,000.Other standard information is as follows:Direct material cost per kilogram $5.20Direct material inputs required for each unit of output 3 kgsDirect labour inputs required for each unit of output 2.5 hoursDuring the month of October, actual results were:Units produced 5,680Direct material purchased 19,060The controller for TL calculated variances for October as follows:Direct material efficiency variance $3,640 FDirect labour efficiency variance $4,995 UVariable overhead spending variance $2,167 FActual fixed overhead cost $44,860Total underapplied fixed overhead $3,680Fixed overhead flexible budget variance $5,040 UThe unfavourable direct material price variance was $.40 per kilogram, and due to significantovertime premiums required due to a machine breakdown, actual direct labour costs exceeded budgeted costs by $1.25 per hour. Fixed overhead is applied based on direct labour hours.Required:1. Calculate the following for the month of October a) Actual price paid per kilogram of material b) Total direct material price variancec) Total kgs of direct material issued to productiond) Actual total direct labour hourse) Total direct labour rate variancef) Flexible budget variance for direct labour g) Variable overhead efficiency varianceh) Actual variable overhead costsi) Variable overhead flexible budget variance j) Fixed overhead ratek) Total budgeted fixed overhead for the month of October l) Fixed overhead production volume varianc