Problem #1

Duarte Company produces many products for household use. Company sells products
to storekeepers as well as to customers. Detergent-DX is one of the products of P&G. It
is a cleaning product that is produced, packed in large boxes and then sold to
customers and storekeepers.

P&G uses a traditional standard costing system to control costs and has established the
following materials, labor and overhead standards to produce one box of Detergent-DX:

● Direct materials; 1.5 pounds @ P12 per pound: P18.00

● Direct labor; 0.6 hours P24 per hour: P14.40
● Variable manufacturing overhead; 0.6 hours @ P5.00: P3.00

During August 2012, company produced and sold 3,000 boxes of Detergent-DX. 8,000
pounds of direct materials were purchased @ P11.50 per pound. Out of these 8,000
pounds, 6,000 pounds were used during August. There was no inventory at the
beginning of August. 1600 direct labor hours were recorded during the month at a cost
of P40, 000. The variable manufacturing overhead costs during August totaled P7, 200.

1.) What is the materials price variance?

a. 4000 unfavorable
b. 4000 favorable
c. 18,000 unfavorable
d. 18,0000 favorable

2.) What is the material usage variance?

a. 4000 unfavorable
b. 4000 favorable
c. 18,000 unfavorable
d. 18,000 favorable

3.) What is the direct labor rate variance?

a.1600 unfavorable
b.1600 favorable
c. 4800 favorable
d. 4800 unfavorable

4.) direct labor efficiency variance respectively?

a. 4800 favorable
b. 4800 unfavorable
c. 1600 unfavorable
d. 1600 favorable

5.) Compute variable Overhead Spending Variance?

a. 800 unfavorable
b. 800 favorable
c. 800 favorable
d. 800 unfavorable

6.) What is the Overhead Efficiency Variance?

a. 1000 favorable
b. 1000 unfavorable
c. 800 favorable
d. 800 unfavorable
 7.) How much is the controllable variance?
a. 800 favorable
b. 1800 unfavorable
c. 800 unfavorable
d. 1800 favorable

Problem #2

Doon Co. produces a product that has the following factory overhead standard costs per
unit. The budgeted production is at the normal capacity of 1,000 units, requiring a
budgeted time of 3,000 hours.

Variable FOH 3 hours at P30 per hour

Fixed FOH 3 hours at P10 per hour

During the month, the company produced 1,100 units and incurred the following
actual factory overhead costs:

Variable FOH 3,250 hours at P29 per hour= P 94,250

Fixed FOH P 36,500

Total P130,750

9.) Which of the following would be the Spending, Efficiency and Volume variance
respectively:

a. 3250 Favorable

b. 1500 Favorable

c. 3250 Unfavorable

d. 1500 Unfavorable

10.) How much would be the Efficiency Variance?

a. 1500 favorable
b. 1500 unfavorable
c. 3000 favorable
d. 3000 unfavorable

11.) How much would be the Volume Variance?

a. 3000 Unfavorable
b. 3000 Favorable
c. 1500 Favorable
d. 1500 Unfavorable

12.) How much is the Variable Spending Variance?

a. 3250 Favorable
b. 3250 Unfavorable
c. 3000 Favorable
d. 3000 Unfavorable

13.) How much is the Fixed Spending Variance?

a. 6500Favorable
b. 1500 Unfavorable
c. 6500 Unfavorable
d. 1500 Favorable
 14.) How much is the Controllable Variance?
a. 1750 Favorable
b. 1750 Unfavorable
c. 6500 Favorable
d. 6500 Unfavorable

15.) How much is the Uncontrollable Variance?

a.6500 Unfavorable
b.6500 Favorable
c.3000 Favorable
d.3000 Unfavorable

16.) How much is the Total Overhead Variance?

a. 1250 Favorable
b. 1250 Unfavorable
c. 3000 Favorable
d. 3000 Unfavorable
Problem #3

Jenga manufacturing has the following standard cost sheet for one of its products:

Direct Materials (6ft @ Php5) 30

Direct Labor (1.5hrs @Php10) 15

Variable Overhead (1.5 hours @Php4) 6

Fixed Overhead (1.5 hours @ Php2) 3

Budgeted Capacity at 17,000 hrs

During the most recent year, the following actual results were recorded:

Production 12,000 units

Fixed Overhead Php33,000

Variable Overhead Php69,000

Direct Materials (71,750 ft purchased) Php361,620

Direct Labor (17,900 hrs) Php182,580

Required:

17. Direct Material Price Variance

a. 2870 UF
b. 2870 F
c. 1250UF
d. 1250F
18. Direct Material Usage Variance
a. 2870 UF
b. 2870 F
c. 1250 UF
d. 1250 F
19. Direct Labor Efficiency Variance
a. 1000 F
b. 1000UF
c. 3580 F
d. 3580 UF

20. Direct Labor Rate Variance

a. 1000F
b. 1000UF
c. 3580 F
d. 3580 UF

21. Variable Spending Variance

a. 2600 F
b. 2600UF
c. 1000F
d. 1000UF

22. Fixed Spending Variance

a. 2600F
b. 2600UF
c. 1000F
d. 1000UF

23. Total Spending Variance

a. 3600F
b. 3600UF
c. 1600UF
d. 1600F

24. Efficiency Variance

a. 400F
b. 400UF
c. 1600F
d. 1600UF

25. Volume Variance

a. 3000F
b. 3000UF
c. 1600F
d. 1600UF