CHAPTER 15- Computation

1. Information about York Company direct material costs is as follows:

Standard unit price P 3.60

Actual quantity purchased 1600
Standard quantity allowed for actual production 1450
Materials purchase price variance – unfavorable P 240

What was the actual purchase price per unit, rounded to the nearest centavos?

a. P3.06
b. P3.75
c. P3.11
d. P3.45

2. Data for Sunday Company’s direct materials costs for June is as follows:

Actual quantity of direct materials purchased 30,000 units

Actual costs of direct materials P84,000
Unfavorable direct materials quantity variance P3,000
Standard quantity of direct materials allowed for June production 29,000

For the month of June, Sunday’s direct materials price variance was

a. P2,800 unfavorable
b. P2,800 favorable
c. P6,000 favorable
d. P6,000 unfavorable

3. Monday, Inc., uses a standard cost system to account for its only product. The
materials standard per unit was 4 kilos at P5.10 per kilo. Production data for April were
as follows:

Materials used 7,800 kilos

Costs of materials used P40,950
Number of finished units purchased 2,000

What is the materials quantity variance for April?

a. P1,020 favorable
b. P1,050 favorable
c. P1,170 unfavorable
d. P1,020 unfavorable

4. Lolo, Inc., uses a standard costing system in manufacturing a certain shirt. Each unit
of finished product contains 2 meters of direct materials. However, a 20% direct material
spoilage calculated on input quantities occurs during the manufacturing process. The
cost of direct material is P30 per meter. The standard direct material cost per unit of
finished product is:

a. P48.50
b. P60.00
c. P72.50
d. P75.00

5. Information about Monday Company’s direct material cost for the month of June 2014
was as follows:

Actual quantity purchased 18,000

Actual unit purchase price P3.60
Materials price variance - unfavorable P3,600
Standard quantity of allowed for actual production 16,000
Actual quantity used 15,000

For June 2014, what is the direct materials quantity variance?

a. P3,400 favorable
b. P3,400 unfavorable
c. P3,600 favorable
d. P3,600 unfavorable

6. Tuesday, Inc., which uses standard cost system, had 5,000 units of raw material X in
its inventory on June 1, 2008. These materials was purchased in May for P12.00 per
unit and carried at a standard cost of P10.00. The following information pertains to raw
material X for the month of June 2014:

Actual number of units purchased 14,000

Actual number of units used 15,000
Standard quantity of allowed for actual production 13,000
Standard price per unit P10.00
Actual price per unit P11.00

The materials purchase price variance for Raw Material X for June was:
a. P14,000 favorable
b. P14,000 unfavorable
c. P15,000 favorable
d. P15,000 unfavorable

7. Data about direct labor of Friday Company is given below:

Standard direct labor hours 30,000

Actual direct labor hours 29,000
Direct labor efficiency variance - favorable P4,000
Direct labor rate variance - favorable P5,800
Total payroll P110,200

What was Friday’s actual and standard direct labor rate?

Actual Direct Labor Rate Standard Direct Labor Rate

a. P2.60 P3.54
b. P3.80 P4.00
c. P4.00 P3.80
d. P5.80 P3.80

8. Information on Tan Company’s direct labor costs is as follows:

Standard direct labor rate P3.75

Actual direct labor rate P3.50
Standard direct labor hours 10,000
Direct labor efficiency variance - unfavorable P4,200

What were the actual hours worked, rounded to the nearest hour?

a. 11,914
b. 10,714
c. 11,120
d. 11,200

9. Each unit of Product O requires two direct labor hours. Employee benefits benefit
costs are treated as direct labor costs. Data on direct labor are as follows:

Number of direct employees 25

Weekly productive hours per employee 30
Estimated weekly wages per employee P240
Employee benefits 25%
The standard direct labor cost per unit of Product O is:

a. P20
b. P10
c. P12
d. P22

10. The direct labor standards for producing a unit of a product are two hours at P10 per
hour. Budgeted production was 1,000 units. Actual production was 900 units direct labor
cost was P10,000 for 2,000 direct labor hours. The direct labor efficiency variance was:

a. P1,000 favorable
b. P2,000 unfavorable
c. P1,000 unfavorable
d. P2,000 favorable

11. The following direct labor information pertains to the manufacture of Product S:

Time required to make one unit 2 direct labor hours

Number of direct workers 50
Number of productive hours per week, per workers 40
Weekly wages per worker P500
Workers’ benefit treated as direct labor costs 20% of wages

What is the standard direct labor cost per unit of Product S?

a. P30
b. P24
c. P15
d. P12

12. The following information pertains to Gold Company’s direct labor for June 2014:

Standard direct labor hours 21,000

Actual direct labor hours 20,000
Favorable direct labor rate variance P8,400
Standard direct labor per hour P6.30

What was Gold Company’s total actual direct labor cost for June 2014?

a. P117,600
b. P134,000
c. P134,400
d. P118,000

13. Silver Company presents the following information for the month May 2014:

Units produced 6,250

Wages paid for 10,400 hours P33,680
Materials costs for 3,850 kilos P17,059
Variances:
Labor rate - unfavorable P1,720
Labor efficiency - favorable P525
Material price - favorable P1,400
Material usage - unfavorable P890

What is the standard price cost per unit?

a. P8.01
b. P5.19
c. P8.94
d. P9.82