Masters Technological Institute of Mindanao Problem 5

Management Advisory Services (MAS 1) Each unit of Product 8 in 1 requires two direct labor hours.
Employee benefit costs are treated as direct labor costs. Data
STANDARD COSTING (MATERIALS, LABOR & OVERHEAD) on direct labor are as follows:

Problem #1 Number of Direct employees 25

Weekly productive hrs per employee 30
Power Purple Company produce Barney with the following Estimated weekly wages per employee P240
standard and actual information. Employee benefits (related to weekly wages) 25%

Standard: The std DL cost per unit of Product 8 in 1 is?

4 raw Materials per unit @ P6 per raw material
2 Direct Labor hours per unit @ P8 per labor hour Problem #6
Variable overhead, 3 machine hours @ P40/hr
Fixed Overhead, 3 machine hours @ P90/hr The std hourly rate was P4.10. Standard hours for the level of
Budgeted fixed factory overhead – P270,000 production are 4,000. The actual rate was P4.27. The labor
Budgeted volume of Production – 1000 rate variance was P654.50, unfavorable. What were the
actual labor hours?
Actual:
3,800 raw materials @ P5.50 per raw material Problem #7
1,750 labor hours @ P8.50 per labor hour
Actual machine hours – 2,550 Hingis had a P750 unfavorable direct labor rate variance and
Actual variable factory overhead – P115,000 an P800 favorable efficiency variance. Hingis paid P7,150 for
Actual fixed factory overhead – P258,000 800 hrs of a labor. What was std direct labor wage rate?
Actual units produced – 900
Problem #8
Required: The overhead variances for Big Company were:
1. Compute for (materials) Variable Overhead spending Variance P 3,600 – F
a) Total materials variance Variable overhead efficiency variance P 6,000 – UF
b) Price variance Fixed overhead spending variance P 10,000 – F
c) Quantity variance Fixed overhead volume variance P 24,000 – F
2. Compute for (Labor)
a) Total labor variance What was the overhead controllable variance?
b) Rate variance
c) Time/Efficiency variance Problem #9
3. Compute for (overhead) Darf Company, which apples overhead on the basis of direct
a) Total overhead variance labor hours. Two direct labor hours are required for each
b) Analysis using product unit. Planned production for the period was set at
i. 4 - way P9,000 units. Manufacturing overhead is budgeted at P
ii. 3 – way 135,000 for the period, of which 20% of this cost is fixed. The
iii. 2 – way 17,200 hrs worked during the period resulted in production
of 8,500 units. Variable manufacturing overhead cost
Problem #2 incurred was P108,500 and fixed manufacturing overhead
Silver manufactures a “one-size-fits-all” ready to wear outfit cost was P28,000. Darf Company uses four-way variance
and uses a standard cost system. Each unit of finished outfit method for analyzing manufacturing overhead.
contains 9 meters of fabric that cost P80 per meter. Based on
experience, a 10% loss on fabric input is incurred. For each 1. The variable overhead spending variance for the period is?
unit of outfit, the standard materials cost is? 2. The variable overhead efficiency variance (quantity)
variance for the period is?
Problem #3 3. The fixed overhead budget (spending) variance for the
Information on Katrina Company’s direct material cost is as period is?
follows: 4. The fixed overhead volume (denominator) variance for the
Std. unit price P 3.60 period is?
Actual qty purchased 1,600
Std. qty allowed for actual production 1,450
Materials purchase price variance – F P 240
What was the actual purchase price per unit, rounded to the
nearest centavos?

Problem #4
The Bohol Company uses standard costing. The following data
are available for October:

Actual qty of direct materials used 23,500 lbs

Std price of direct materials P2 per pound
Material quantity variance P 1,000 UF

The std quantity of materials allowed for October production

is?