.

Answer: D
Nyclyn (24 ÷ 0.80 x P15) P 450.00
Salex (19.20 ÷ 0.80 x P21) 504.00
Protet (10 x P28) 280.00
Total P1,234.00

. Answer: C
Required inputs to be placed in process per unit of product: 2.25 ÷0.75 3.0 yards
Standard Material cost per unit of product: 3.0 x P150 P450

. Answer: B
Required inputs of raw materials (in pounds) (60 ÷ 0.80) 75.00
Standard price per pound (2.5 x 0.98) x 2.45
Standard materials cost per unit 183.75

. Answer: D
Net price per yard:
Purchase price 40.00
Freight 1.00
Purchase discount 0.03 x 40 ( 1.20)
Standard cost per yard 39.80
Standard quantity per scarf 0.475/0.95 0.50
Standard cost per scarf: 0.50 x 39.80 19.90

. Answer: C
Total Minutes per worker (8 hours x 60) 480
Rest Time 60
Productive minutes 420
Output per day per worker (420 ÷ 35) in 10-liter batch 12
Production hour – good units 35 min
Rest minutes (60 ÷ 12) 5 min
Minutes used for rejects (35 + 5) ÷ 5 good units 8 min
Total standard minutes per 10-good liter batch 48 Min

. Answer: B
Weekly wages per worker 1,000
Fringe benefits (1,000 x 0.25) 250
Total weekly direct labor cost per worker 1,250
Labor cost per hour (1,250 ÷ 40 hrs) 31.25
Labor cost per unit (31.25 x 2.50 hrs) P78.125

. Answer: D
Required number of quarts of berries (6 ÷ 0.80) 7.50
Cost of berries (7.50 @ P8.00) 60
Cost of other ingredients (10 x 4.50) 45
Standard materials cost per batch 105

. Answer: C
Minutes required by sorting good berries 6 quarts @ 3 min. 18
Minutes required by mixing 12
Total number of minutes 30
 Standard labor cost per batch (0.50 @ P50) P25

. Answer: A
Unit cost of materials: (Debit to Goods in Process + Debit to Materials Quantity Variance - Credit to Materials
Price Variance)/Number of Units Completed
Total debits to work in process account P51,690
Debit to materials quantity variance 1,970
Credit to materials price variance ( 3,740)
Actual materials cost P49,920
Per unit cost: P49,920/96,000 P0.52

. Answer: A
Actual quantity used 1,066
Add favorable quantity (209/5.5) 38
Standard quantity allowed 1,104

. Answer: C
Actual materials price 105,000/35,000 3.00
Standard Quantity 12,000 x 2 24,000
Standard price 60,000/24,000 2.50
Actual Quantity used: 24,000 + (2,500/2.5) 25,000
Price variance based on usage: 25,000 x (3 – 2.50) 12,500

. Answer: D
Actual Quantity used 14,910
Favorable Quantity 3,735/1.5 2,490
Standard Quantity allowed 17,400
Production in units 17,400/15 1,160

. Answer: A
AQ @ SP (3,150 x 40) P126,000
SQ @ SP (600 x 5 x 40) 120,000
Unfavorable Quantity Variance P 6,000

. Answer: A
Actual quantity used (pounds) 23,500
Less: Excess pounds used (1,000 ÷ 2) 500
Standard Quantity Allowed 23,000
Alternative Solution using the formula for Usage Variance:
MUV = (AQ –SQ)SP
1,000 = (23,500 – SQ)2
1,000 ÷ 2 = 23,500 – SQ
500 = 23,500 – SQ
SQ = 23,000

. Answer: D
Actual Purchase Costs – (AQ x SP)
= 84,000 – (30,000 x 3) 6,000 Favorable
Standard Price = Usage Variance ÷ (AQ – SQ)
3,000 ÷ (30,000 – 29,000) = P3
. Answer: B
The actual purchase price per unit can be conveniently solved by using the purchase price variance - MPV =
AQ(AP-SP)
-240 = 1,600 (AP – 3.60)
-240 ÷ 1,600 = AP – 3.60
0.15 = AP – 3.60
AP = 3.45

. Answer: C
MPV = 1,400(1.10 – 1.00)
= 140

. Answer: A
MUV = (AQ – SQ)SP
= (2,300 – 2,100) 6.25
= 1,250 Unfavorable

. Answer: C
Actual materials cost 26,400
AQ @ SP (22,000 x 1.25) 27,500
Favorable Price Variance ( 1,100)

. Answer: A
Standard materials cost per batch (200 x 1) + (840 x 0.20) + (7 x 2) + (3 x 6) P400
Expected yield in batch (20,160 ÷ 1,050) 19.20
Actual yield 18.50
Unfavorable yield in batch 0.70
Unfavorable yield variance (0.70 x 400) P 280

. Answer: D
Materials
Actual cost 127,500
Budgeted cost (8,500 @ 15) 127,500
Materials cost variance 0
Labor
AH @ SR (6,375 @ 12) 76,500
SH @ SR (8,500 @ 0.75 @ 12) 76,500
Labor Efficiency Variance 0
Actual Payroll 77,775
AH @ SR (6,375 @ 12) 76,500
Labor Rate Variance 1,275

. Answer: C
(AR - SR) x AH = rate variance
Therefore, the total variance (P654.50) when divided by the hourly difference (P4.27 - P4.10) will equal the actual
hours.
Actual hours (P654.50/P.17) = 3,850.
Proof: (P4.27 - P4.10) x 3,850 = P654.50

. Answer: A
Labor AH Std. Mix at AH Diff SR Labor Mix Variance
 M 4,500 5,000 (500) P10 P (5,000)
F 3,000 2,500 500 5 2,500
7,500 7,500 - P (2,500)Fav

. Answer: A
Labor Yield Variance:
Expected Yield 40,000
Actual Yield 36,000
Difference 4,000
Multiply by Standard labor cost per unit P1.5625*
Yield Variance P6,250U
*Standard cost ÷ Standard Yield = P6,250 ÷ 4,000 = P1.5625

. Answer: C
Direct labor cost at standard rate 7,150 – 750 6,400
Standard rate 6,400/800 8.00

. Answer: A
Actual cost 10,000
Favorable Rate Variance 1,000
Actual hours @ standard rate 11,000
Standard Rate: 11,000 ÷ 2,000 5.50
Expected yield (400,000 units / 750 hrs) 7,500 = 40,000

. Answer: C
LEV: (20,000 – 21,000)6.15 = (6,150)F
Standard Rate:
3,000 = 126,000 – 20,000SR
123,000 = 20,000SR
SR = 6.15

. Answer: C
LEV: (410 x 20) – 8,440 = (240)F

. Answer: C
Actual hours 1,148,000/16.40 70,000
Less Unfavorable hours 120,000/16 7,500
Standard hours allowed 62,500
Standard rate: 960,000/60,000 16.00

. Answer: B
SR = LEV ÷ (AH – SH)
= -4,000 ÷ (29,000 – 30,000)
= P4.00

. Answer: C
AR = SR – (LRV ÷ AH)
AR = P4.00 – (5,800 ÷ 29,000)
= P3.80

. Answer: B
 Variable OH rate/hr - P27,000 ÷ 45,000 P 0.60
Direct labor rate/hr = P0.60 ÷ 0.20 P 3.00
Variable OH is applied at 20% of direct labor cost
Actual hours P140,700 ÷ (P3 – P0.20) 50,250
Unfavorable hours P5,100 ÷ P3 1,700
SH allowed 48,550

. Answer: B
Actual direct labor costs P241,500
Actual hrs at std labor rate (34,500 x P6.4) 220,800
Unfavorable labor rate variance P 20,700
Standard labor rate:
-3,200 = (34,500 – 35,000) SR
3,200 = 500SR
SR = 6.40

. Answer: B
Actual hours = Labor rate variance ÷(AR-SR)
P12,000 ÷ (P10 – P9) 12,000 hours

. Answer: D
LRV = AH(AR – SR)
-5,500 = 10,000(7.50 – SR)
-5,500 ÷ 10,000 = 7.5 – SR
-0.55 = 7.50 – SR
SR = 8.05

. Answer: D
The controllable variance is the sum of the spending variances plus the efficiency variance.
Variable overhead spending variance P( 3,600)
Fixed overhead spending variance P(10,000)
Variable overhead efficiency variance P 6,000
Total controllable variance P 7,600
The volume variance is not considered a controllable variance.

. Answer: A
Monthly budgeted fixed overhead (150,000/12) 12,500
Applied fixed overhead (2,450 x 2 x 2.5) 12,250
Unfavorable volume variance 250

. Answer: A
Variable OH per DLH 48,000/24,000 2.00
Actual overhead 147,000
Budgeted OH at standard hours:
Variable 21,000 x 2 42,000
Fixed 108,000 150,000
Favorable controllable/budget variance ( 3,000)

. Answer: A
Budgeted fixed overhead 81,000
Applied fixed overhead based on 80% achieved (24,000 x 3) 72,000
 Unfavorable volume variance 9,000
Fixed overhead rate based on 27,000 hours: (81,000 ÷ 27,000) 3.00

. Answer: D
Actual overhead 230,000
Less Budgeted OH at standard hours
Variable 32,000 x 5 160,000
Fixed 64,000 (224,000)
Unfavorable budget variance 6,000

. Answer: C
Actual overhead 14,000
Budget at SH 15,600
Favorable controllable variance ( 1,600)

. Answer: C
OH application rate based on DL cost 600,000/(50,000 x 6) 200%
Applied overhead 325,000 x 2 650,000
Actual overhead 620,000
Overapplied Overhead 30,000

. Answer: D
Actual overhead 230,000
Budget at standard hours:
Fixed OH 64,000
Variable OH (32,000 x 5) 160,000 224,000
Unfavorable controllable variance 6,000

. Answer: B
Budgeted fixed overhead (30,000 x 2) 60,000
Applied FOH (25,000 x 2) 50,000
Unfavorable volume variance 10,000

. Answer: C
Efficiency variance = (AH – SH) x SVOHR (14,000 – 13,500) 6 = 3,000 UNF
Standard hours: 4,500 x 3 13,500

. Answer: D
Efficiency Variance = (31,500 – 30,000) 10 15,000 Unfavorable
Standard hours: 20,000 units x 1.5 hours

. Answer: A
Fixed overhead rate per hour 8.50 – 6.00 2.50
Denominator hours (previous number) 40,000/2.5 16,000

. Answer: B
Actual OH (10,300 + 19,500) P29,800
Less: Budgeted OH at actual hours (P2 x 9,500 hrs) + P10,000 29,000
Unfavorable spending variance P 800

. Answer: C
 EV = (AH – SH) SVOHR (14,000 – 13,500) 6 3,000U
SH (4,500 x 3) 13,500

. Answer: A
Actual OH P15,000
Budgeted OH at actual hours (3,500 x P2.50) + P7,000 15,750
Favorable spending variance P( 750)

. Answer: A
Fixed OH spending variance:
Actual Fixed OH - Budgeted Fixed OH (P315,000 – P300,000) P15,000 U
Fixed OH volume variance:
(Budgeted Units – Actual Units) x SFOH rate (50,000 – 55,000) x P6 P(30,000)F
Budgeted production: P300,000 ÷ P3 ÷ 2 hours

. Answer: A
Actual variable overhead 520,000
AH @ SVOHR (270,000 x 2) 540,000
Variable Oh spending variance, Favorable ( 20,000)
AH @ SVOHR 540,000
SH @ SVOH (260,000 x 2) 520,000
Unfavorable VOH efficiency variance 20,000

. Answer: D
Actual P10,100
Budget (4,500 x 2.40) 10,800
Favorable Budget variance P( 700)

. Answer: C
Fixed overhead per hour: 16 x 0.7 11.20
Annual fixed OH budget 5,000 x 12 x 11.20 672,000

. Answer: B
Actual variable overhead 62,400
Variable OH applied 62,000
Unfavorable variable OH variance 400

. Answer: C
Applied fixed overhead (3,000 x 3 x 3.50) 31,500
Less: Favorable volume variance 875
Budgeted fixed overhead 30,625

. Answer: A
Standard rate: 50,000/40,000 1.25
Excess rate 1,080/3,600 0.03
Actual rate 1.28

. Answer: A
Applied fixed overhead 48,000
Less favorable volume variance 12,000
Budgeted fixed overhead 36,000
. Answer: A
Unfavorable volume variance 25,000
Unfavorable VOH spending variance 18,000
Total 43,000
Net Unfavorable variance 2,000
Favorable fixed OH budget variance 41,000

. Answer: A
Net OH variance, Unfavorable 2,000
Less: Unfavorable volume variance ( 18,000)
Unfavorable spending variance ( 25,000)
Favorable FOH budget variance 41,000

. Answer: C
Budgeted fixed OH 500,000
Add: Favorable volume variance 12,000
Applied fixed overhead 512,000

. Answer: A
Applied FOH (8,000 x 6) 48,000
Less: Favorable volume variance 12,000
Budgeted FOH 36,000

. Answer: A
Budgeted fixed OH (3,000,000 ÷ 12 months) 250,000
Applied fixed OH (26,000 @ 2 x 5) 260,000
Favorable volume variance ( 10,000)F
Fixed OH rate per hour (3,000,000 ÷ 600,000) 5.00

. Answer: B
Labor Efficiency: (53,500 – 52,000) 8 12,000
Variable OH Efficiency (53,500 – 52,000) 6 9,000
Total efficiency variance 21,000

. Answer: D
Total variable overhead variance (80,000 – 90,000) 10,000 favorable
Variable overhead spending variance 1,200 favorable
Variable overhead efficiency variance 8,800 favorable
8,800 ÷ 20 440 Favorable

. Answer: D
Fixed overhead volume variance is a more meaningful variance in evaluating the use of the capacity.

. Answer: B
Actual variable OH P250,000
Budgeted VOH at actual hours (80,000 x P3) 240,000
Unfavorable VOH spending variance P 10,000

. Answer: A
(38,000 units – 50,000 units) x P8 P96,000
. Answer: B
Spending [P315,000 – (53,500 x P6)] P(6,000)
Efficiency [(53,500 – 52,000) x P6] P 9,000

. Answer: B
Spending [P260,000 – (P3M ÷ 12)] P10,000U
Volume [(26,000 – 25,000) x P10] P10,000F

. Answer: C
Actual fixed overhead P88,000
Budget fixed overhead (4,000 hrs @ P20) 80,000
Unfavorable fixed OH Spending variance P 8,000
Budgeted (denominator) hours (40,000 units x 6 ÷ 60) 4,000

. Answer: B
Budget fixed overhead P80,000
Applied fixed overhead (38,000 x 0.10 x P20) 76,000
Unfavorable volume variance P 4,000

. Answer: A
Actual variable overhead P 16,400
Budget at actual hours (4,200 x P4) 16,800
Favorable variable OH spending variance P ( 400)

. Answer: C
Unfavorable Efficiency Variance: (AH – SH) SVOHR
(4,200 – 3,800) x P4 = 1,600 UNF
SH allowed (38,000 units x 1 ÷ 10) = 3,800 hours

. Answer: A
Actual variable overhead 108,500
Budgeted VOH at actual hours (17,200 x 6) 103,200
Variable overhead spending variance, UNF 5,300
VOH rate per hour (135,000 x 0.80) ÷ 18,000 hours P6.00

. Answer: C
The computation of variable overhead efficiency variance involves the comparison of the actual hours and standard
hours allowed by actual production.
(17,200 – 17,000) x P6 1,200 UNF
Standard hours allowed: 8,500 x 2 17,000

. Answer: D
The amount of fixed overhead budget (spending) variance is calculated by subtracting from the actual fixed
overhead the amount of budgeted fixed overhead.
Actual fixed overhead 28,000
Budgeted fixed overhead (135,000 x 0.2) 27,000
Unfavorable fixed overhead budget variance 1,000

. Answer: B
The amount of volume variance (denominator or over/underapplied fixed overhead variance) is calculated by
 comparing the budgeted fixed overhead and fixed overhead applied to production.
Budgeted fixed overhead (135,000 x 0.2) 27,000
Applied fixed overhead (8,500 x 3) 25,500
Underapplied (unfavorable) volume variance 1,500
Alternative calculation: (9,000 – 8,500) x 3 1,500
Fixed overhead per unit (27,000 ÷ 9,000) 3

. Answer: C
Std unit cost:
Variable (7,000,000 x 0.60) ÷ 140,000 P30
Fixed OH (11,200,000 x 0.50) ÷ 160,000 35
Std unit cost P65
CGS – Std (100,000 x 65) 6,500,000
OH Volume Variance: (160,000 – 140,000) x 35 P 700,000 UNF

. Answer: A
SQ allowed (22,500 x 6) 135,000
Unfavorable usage variance 3,000
Actual quantity of materials 138,000

. Answer: C
Actual quantity purchased and used at standard price (138,000 x 3) 414,000
Favorable price variance 6,900
Actual Quantity @ Actual Price 407,100
Actual Price (407,100 ÷ 138,000) P2.95

. Answer: C
SH @ SR 90,000
Efficiency Variance 7,000
AH @ SR 97,000
Actual hours (97,000 ÷ 5) 19,400

. Answer: D
AH @ SR (19,400 x 3) 58,200
Spending variance 1,300
Actual Variable Overhead 59,500

. Answer: B
Applied Fixed OH 126,000
Underapplied fixed overhead 14,000
Budgeted fixed overhead 140,000

. Answer: C
Denominator or Budgeted Hours: (140,000 ÷ 7) = 20,000

. Answer: C
MCE = Value Added Hours ÷ Throughput Time
Processing hours 8.00
Inspection hours 1.50
Waiting time 1.50
Move time 1.50
 Throughput time 12.50
MCE (8.00 ÷ 12.50) 64%

. Answer: A

. Answer: A
Delivery cycle time:
Total waiting time 15.00
Inspection time 1.50
Processing time 3.00
Move time 2.50
Delivery Cycle Time 22.00

. Answer: C
A favorable volume variance arises when the applied fixed overhead is higher than the budgeted fixed overhead.
Budgeted fixed overhead 500,000
Favorable volume variance (overapplied) 12,000
Applied fixed overhead 512,000