) ) ) ) ) ) ) ) )

) ) ) ) ) ) ) ) )

Standard
Costing for
Cost Control
 GROUP 5- REPORTERS
) ) ) ) ) ) ) ) )
) ) ) ) ) ) ) ) )

CA T H ERINE USA O KARE E R R OLAN

N JA B N AP DO
RI CA A. G P.
O N
M E
A M
.

RA D A JUZT S O MARIA G C A MAR

JO INE NA EL AN IEL
E PI D M
M B . SI S
. .
) ) ) ) ) ) ) ) )
) ) ) ) ) ) ) ) )
SPECIFIC TOPIC
Contents

01 Standard costing and

02 Overhead variances and
variance analysis their different analyses
for materials and (1,
labor 2, 3, and 4-way)

03 Price,
mix, and yield
variances
 STANDARD COST
) ) ) ) ) ) ) ) )
) ) ) ) ) ) ) ) )
Standard costs represent the planned costs of production and are generally
established well before production begins.
Standard cost comprises the standard quantity and standard price.
Standard costs are the scientifically predetermined costs of manufacturing
a single unit or several product units or rendering service during a
specified future period.
The purpose of standard cost accounting is to control costs and promote
efficiency.
Standard costing is “the preparation of standard costs and applying them
to measure the variations from actual costs and analyzing the causes of
variations with a view to maintaining maximum efficiency in production.
) ) ) ) ) ) ) ) )
) ) ) ) ) ) ) ) )
STANDARD COST

) ) ) ) ) ) )
Also known: Different from:

Planned Cost Estimated Cost

Predicted Cost
Scheduled Costs
Specification Costs
) ) ) ) ) ) ) ) )
) ) ) ) ) ) ) ) )
USES OF STANDARD COST

1. Profit planning and cost-volume-profit analysis

2. Responsibility accounting
3. Budgeting
4. Performance evaluation
5. Pricing
6. Interim reporting
) ) ) ) ) ) ) ) ) ESTABLISHMENT OF STANDARDS
) ) ) ) ) ) ) ) )
An integral part of any standard cost system is the setting of standards
for direct materials, direct labor, and factory overhead.

Direct Direct
Materials Labor
Standards: Standards:
1. Direct Materials 1.Direct Labor Factory Overhead
Price Standards Price Standards
2. Direct Materials Standards
Usage(Efficiency) 2. Direct
Standards Labor
Efficiency
Standards
 COST CONTROL
) ) ) ) ) ) ) ) )
) ) ) ) ) ) ) ) )

Cost control refers to identifying a cost

with its related benefits and making sure
that the cost is justified given the benefits
derived.
Cost control leads to cost reduction.
Standard Cost provides a very useful tool
for cost control.
) ) ) ) ) ) ) ) )
) ) ) ) ) ) ) ) )
VARIANCE ANALYSIS

Variance Analysis is the resolution into constituent parts and the

explanation of the variances.
Variance analysis is a technique that can be used by management to
measure performance, correct inefficiencies, and deal with the
accountability function.
) ) ) ) ) ) ) ) )
) ) ) ) ) ) ) ) )
FAVORABLE t UNFAVORABLE
VARIANCES

) ) ) ) )
Favorable Variances (F)
Credit Variance
arise when actual costs are
less than budgeted costs or
actual sales/profit exceed
budgeted.
Unfavorable Variances (UF)
Debit Variance
arise when actual costs
exceed budgeted or actual
sales/profit are less than
budgeted

) )
AC < SC AC >SC
) ) ) ) ) ) ) ) ) EXAMPLE
) ) ) ) ) ) ) ) )

Case 1
Actual Cost- 850,000
Standard Cost- 800,000

Case 2
Actual Cost- 580,000
Standard Cost- 750,000
) ) ) ) ) ) ) ) ) EXAMPLE
) ) ) ) ) ) ) ) )
Case 1

Case 1 Actual Cost P850,000

Actual Cost- 850,000 Standard Cost (800,000)
Standard Cost- 800,000 Variance UF (F) P50,000 UF

Case 2
Actual Cost- 580,000
Standard Cost- 750,000
Case 2

Actual Cost P580,000

Standard Cost (750,000)
Variance UF (F) (P170,000) F
 VARIANCE ANALYSIS FOR MATERIAL
) ) ) ) ) ) ) ) )
) ) ) ) ) ) ) ) )
Materials Variances: Price Variance & Efficiency (Usage) Variance

A.Materials Price Variances

Formulas:
1. Material Price Variance= Actual Quantity x (Actual Price - Standard Price)

2. Actual Quantity x Actual Price xxx

Actual Quantity x Standard Price

(xxx) Material Price Variance xxx

3. Actaul Price xxx

Less: Standard Price xxx
Difference in Price xxx
x Actual Quantity xxx
Material Price Variance xxx
) ) ) ) ) ) ) ) )
ILLUSTRATION
) ) ) ) ) ) ) ) )

Last September, the following events took place at ANA MANA Company.
a.Produced 50,000 plastic microcomputer cases
b.Standard variable costs per unit (per case)
Direct materials; 2 pounds at P1.00 P2.00
Direct labor; 0.10 hours at P15 P1.50
Variable manufacturing overhead, 0.10 hrs at P5 P0.50
c.Fixed manufacturing overhead cost
Monthly budget - for 40,000 cases or 4,000 standard hours P80,000
d.Actual production costs
Direct materials purchased 200,000 lbs at P1.20 240,000
Direct materials used - 110,000 lbs at P1.20 132,000
Direct labor - 6,000 hours at P14 84,000
Factory overhead 111,000
) ) ) ) ) ) ) ) )
A. MATERIALS PRICE VARIANCES
) ) ) ) ) ) ) ) )

Solution
Material Price Variance = Actual Quantity x (Actual Price - Standard Price)
Material Price Variance = P200,000 x (P1.20 - P1.00)
Material Price Variance = P200,000 x .20
Material Price Variance = P40,000 unfavorable

Actual Quantity x Actual Price (200,000 x 1.20) P240,000

Actual Quantity x Standard Price (200,000 x 1.00) (200,000)
Material Price Variance P40,000 unfavorable

Actaul Price P1.20

Less: Standard Price 1.00
Difference in Price 0.20
x Actual Quantity 200,000
Material Price Variance P40,000 unfavorable
 VARIANCE ANALYSIS FOR MATERIAL
) ) ) ) ) ) ) ) )
) ) ) ) ) ) ) ) )
Materials Variances: Price Variance & Efficiency (Usage) Variance

B.Materials Efficiency (Usage) Variances

Formulas:
1. Material Usage Variance= Standard Price x (Actual Quantity - Standard Quantity)

2. Actual Quantity x Standard Price xxx

Standard Quantity x Standard Price xxx
Material Usage Variance xxx

3. Actaul Quantity xxx

Less: Standard Quantity xxx
Difference in Quanity xxx
x Standard Price xxx
Material Usage Variance xxx
) ) ) ) ) ) ) ) )
ILLUSTRATION
) ) ) ) ) ) ) ) )

Last September, the following events took place at ANA MANA Company.
a.Produced 50,000 plastic microcomputer cases
b.Standard variable costs per unit (per case)
Direct materials; 2 pounds at P1.00 P2.00
Direct labor; 0.10 hours at P15 P1.50
Variable manufacturing overhead, 0.10 hrs at P5 P0.50
c.Fixed manufacturing overhead cost
Monthly budget - for 40,000 cases or 4,000 standard hours P80,000
d.Actual production costs
Direct materials purchased 200,000 lbs at P1.20 240,000
Direct materials used - 110,000 lbs at P1.20 132,000
Direct labor - 6,000 hours at P14 84,000
Factory overhead 111,000
) ) ) ) ) ) ) ) ) A. MATERIALS EFFICIENCY (USAGE) VARIANCES
) ) ) ) ) ) ) ) )

Solution
Material Usage Variance= Standard Price x (Actual Quantity - Standard Quantity)
Material Usage Variance = P1.00 x (110,000- (50,000 x 2 pounds))
Material Usage Variance= P1.00 x (110,000-100,000)
Material Usage Variance= P1.00 x 10,000
Material Usage Variance= P10,000 unfavorable

Actual Quantity x Standard Price (110,000x 1.00) P110,000

Standard Quantity x Standard Price (50,000 x 2 x P1.00) (100,000)
Material Usage Variance P10,000 unfavorable

Actaul Quantity P 110,000

Less: Standard Quantity (50,000 x 2) 100,000
Difference in Quanity 10,000
x Standard Price P1.00
Material Usage Variance P10,000 unfavorable
 VARIANCE ANALYSIS FOR LABOR
) ) ) ) ) ) ) ) )
) ) ) ) ) ) ) ) )
Labor Variances: Rate Variance & EfficiencyVariance

A.Labor Rate Variances

Formulas:
1. Labor Rate Variance= Actual hours x (Actual Rate - Standard Rate)

2. Actual Hours x Actual Rate xxx

Actual Hours x Standard Rate xxx
Labor Rate Variance xxx

3. Actaul Rate xxx

Less: Standard Rate xxx
Difference in Rate xxx
x Actual Hours xxx
Labor Rate Variance xxx
) ) ) ) ) ) ) ) )
ILLUSTRATION
) ) ) ) ) ) ) ) )

Last September, the following events took place at ANA MANA Company.
a.Produced 50,000 plastic microcomputer cases
b.Standard variable costs per unit (per case)
Direct materials; 2 pounds at P1.00 P2.00
Direct labor; 0.10 hours at P15 P1.50
Variable manufacturing overhead, 0.10 hrs at P5 P0.50
c.Fixed manufacturing overhead cost
Monthly budget - for 40,000 cases or 4,000 standard hours P80,000
d.Actual production costs
Direct materials purchased 200,000 lbs at P1.20 240,000
Direct materials used - 110,000 lbs at P1.20 132,000
Direct labor - 6,000 hours at P14 84,000
Factory overhead 111,000
) ) ) ) ) ) ) ) ) A. LABOR RATE VARIANCES
) ) ) ) ) ) ) ) )

Solution
Labor Rate Variance= Actual hours x (Actual Rate - Standard Rate)
Labor Rate Variance= 6,000 x ( P14.00- 15.00)
Labor Rate Variance = 6,000 x (1.00)
Labor Rate Variance = (P6,000)
favorable

Actual Hours x Actual Rate (6,000 x P14.00) 84,000

Actual Hours x Standard Rate (6,000 x P15.00) (90,000)
Labor Rate Variance (P6,000) favorable

Actaul Rate P14.00

Less: Standard Rate (15.00)
Difference in Rate (1.00)
x Actual Hours 6,000
Labor Rate Variance (P6,000) favorable
 VARIANCE ANALYSIS FOR LABOR
) ) ) ) ) ) ) ) )
) ) ) ) ) ) ) ) )
Labor Variances: Rate Variance & EfficiencyVariance
B.Labor Efficiency Variances
Formulas:
1. Labor Efficiency Variance= Standard Ratex (Actual Hours - Standard Hours)

2. Actual Hours x Standard Rate xxx

Standard Hours x Standard Rate xxx
Labor Efficiency Variance xxx

3. Actaul Hours xxx

Less: Standard Hours xxx
Difference in Hours xxx
x Standard Rate xxx
Labor Efficiency Variance xxx
) ) ) ) ) ) ) ) )
ILLUSTRATION
) ) ) ) ) ) ) ) )

Last September, the following events took place at ANA MANA Company.
a.Produced 50,000 plastic microcomputer cases
b.Standard variable costs per unit (per case)
Direct materials; 2 pounds at P1.00 P2.00
Direct labor; 0.10 hours at P15 P1.50
Variable manufacturing overhead, 0.10 hrs at P5 P0.50
c.Fixed manufacturing overhead cost
Monthly budget - for 40,000 cases or 4,000 standard hours P80,000
d.Actual production costs
Direct materials purchased 200,000 lbs at P1.20 240,000
Direct materials used - 110,000 lbs at P1.20 132,000
Direct labor - 6,000 hours at P14 84,000
Factory overhead 111,000
) ) ) ) ) ) ) ) ) B. LABOR EFFICIENCY VARIANCES
) ) ) ) ) ) ) ) )

Solution
Labor Efficiency Variance= Standard Rate x (Actual Hours - Standard Hours)
Labor Efficiency Variance= P15.00 x (6,000 - (50,000 x .10))
Labor Efficiency Variance= P15.00 x (6,000 -
5,000) Labor Efficiency Variance= P15.00 x 1000
Labor Efficiency Variance= P15,000 unfavorable

Actual Hours x Standard Rate (6,000 x P15.00) 90,000

Standard Hours x Standard Rate (5,000 x 15.00) (75,000)
Labor Efficiency Variance P15,000 unfavorable
Actual Hours 6,000
Less: Standard Hours (50,000 x .10) 5,000
Difference in Hours 1,000
x Standard Rate P15.00
Labor Efficiency Variance P15,000 unfavorable
 OVERHEAD VARIANCE
) ) ) ) ) ) ) ) )
) ) ) ) ) ) ) ) )

1. One Factor Method

Formula
Actual Factory Overhead xxx
Less: Applied Overhead xxx
Total Factory Overhead Variance xxx
) ) ) ) ) ) ) ) )
ILLUSTRATION
) ) ) ) ) ) ) ) )

Last September, the following events took place at ANA MANA Company.
a.Produced 50,000 plastic microcomputer cases
b.Standard variable costs per unit (per case)
Direct materials; 2 pounds at P1.00 P2.00
Direct labor; 0.10 hours at P15 P1.50
Variable manufacturing overhead, 0.10 hrs at P5 P0.50
c.Fixed manufacturing overhead cost
Monthly budget - for 40,000 cases or 4,000 standard hours P80,000
d.Actual production costs
Direct materials purchased 200,000 lbs at P1.20 240,000
Direct materials used - 110,000 lbs at P1.20 132,000
Direct labor - 6,000 hours at P14 84,000
Factory overhead 111,000
) ) ) ) ) ) ) ) ) ONE FACTOR METHOD
) ) ) ) ) ) ) ) )

Solution
Actual Factory Overhead P111,000
Less: Applied Overhead (5,000x5) +( 5,000x20) 125,000
Total Factory Overhead Variance (P14,000) favorable
 OVERHEAD VARIANCE
) ) ) ) ) ) ) ) )
) ) ) ) ) ) ) ) )
2.Two Variance Method
Formula

1. Controllable (Budgat) Variance

Actual Factory Overhead xxx

Less: Budget Allowance Based on Standard Hours
Fixed Overhead xxx
Variable (Standard Hours x Variable Rate) xxx xxx
Controllable Variance xxx

2.Volume (Capacity or Production) Variance

Budget Allowance Based on Standard Hours xxx

Less: Standard Hours x Standard Overhead Rate xxx
Volume Variance xxx
) ) ) ) ) ) ) ) )
ILLUSTRATION
) ) ) ) ) ) ) ) )

Last September, the following events took place at ANA MANA Company.
a.Produced 50,000 plastic microcomputer cases
b.Standard variable costs per unit (per case)
Direct materials; 2 pounds at P1.00 P2.00
Direct labor; 0.10 hours at P15 P1.50
Variable manufacturing overhead, 0.10 hrs at P5 P0.50
c.Fixed manufacturing overhead cost
Monthly budget - for 40,000 cases or 4,000 standard hours P80,000
d.Actual production costs
Direct materials purchased 200,000 lbs at P1.20 240,000
Direct materials used - 110,000 lbs at P1.20 132,000
Direct labor - 6,000 hours at P14 84,000
Factory overhead 111,000
) ) ) ) ) ) ) ) ) TWO VARIANCE METHOD
) ) ) ) ) ) ) ) )

Solution
Controllable variance
Actual factory overhead P 111,000
Less: Budget allowed on std. hrs.Fixed P 80,000
Variable (50,000 x .10 x 5) 25,000 105,000
Controllable variance – unfavorable P 6,000

Volume variance
Budget allowed on standard hours P 105,000
Less: Standard hrs. x Factory overhead Rate (5,000x5) +( 5,000x20) 125,000
Volume variance – favorable (P20,000)
 OVERHEAD VARIANCE
) ) ) ) ) ) ) ) )
) ) ) ) ) ) ) ) )
3.Three Variance Method
Formula

1. Spending Variance

Actual Factory Overhead xxx

Less: Budget Allowance Based on Actual Hours
Fixed Overhead xxx
Variable (Actual Hours x Variable Rate) xxx xxx
Spending Variance xxx

2.Variable Efficiency Variance

Budget Allowance Based on Actual Hours xxx

Less: Budget Allowance based on Standard Hours xxx
Variable Efficiency Variance xxx

3.Volume Variance

Budget Allowance Based on Standard Hours xxx

Less: Standard Hours x Factory Overhead Rate xxx
Volume Variance xxx
) ) ) ) ) ) ) ) )
ILLUSTRATION
) ) ) ) ) ) ) ) )

Last September, the following events took place at ANA MANA Company.
a.Produced 50,000 plastic microcomputer cases
b.Standard variable costs per unit (per case)
Direct materials; 2 pounds at P1.00 P2.00
Direct labor; 0.10 hours at P15 P1.50
Variable manufacturing overhead, 0.10 hrs at P5 P0.50
c.Fixed manufacturing overhead cost
Monthly budget - for 40,000 cases or 4,000 standard hours P80,000
d.Actual production costs
Direct materials purchased 200,000 lbs at P1.20 240,000
Direct materials used - 110,000 lbs at P1.20 132,000
Direct labor - 6,000 hours at P14 84,000
Factory overhead 111,000
) ) ) ) ) ) ) ) ) THREE VARIANCE METHOD
) ) ) ) ) ) ) ) )

Solution
Spending variance
Actual factory overhead P 111,000
Less: Budget allowed on actual hrs.
Fixed P80,000
Variable (6,000 x P5.00) 30,000 110,000
Spending variance – unfavorable P 1.00

Variable Efficiency variance

Budget allowed on actual hours P
110,000 Less: Budget allowed on standard hrs. 105,000
Variable Efficiency variance-unfavorable 5,000

Volume variance
Budget allowed on standard hours P 105,000
Less: Std. hrs. x factory overhead rate 125,000
Volume variance – favorable (P 20,000)
 OVERHEAD VARIANCE
) ) ) ) ) ) ) ) )
) ) ) ) ) ) ) ) )
4.Four Variance Method
A.Variable Overhead Variance

Formula

1. Variable Spending Variance

Actual Variable Factory Overhead xxx

Less: Actual Hours x Variable Overhead Rate xxx
Variable Spending Variance xxx

2.Variable Efficiency Variance

Actual Variable Factory Overhead xxx

Less: Standard Hours x Variable Overhead Rate xxx
Variable Efficiency Variance xxx
) ) ) ) ) ) ) ) )
ILLUSTRATION
) ) ) ) ) ) ) ) )

Last September, the following events took place at ANA MANA Company.
a.Produced 50,000 plastic microcomputer cases
b.Standard variable costs per unit (per case)
Direct materials; 2 pounds at P1.00 P2.00
Direct labor; 0.10 hours at P15 P1.50
Variable manufacturing overhead, 0.10 hrs at P5 P0.50
c.Fixed manufacturing overhead cost
Monthly budget - for 40,000 cases or 4,000 standard hours P80,000
d.Actual production costs
Direct materials purchased 200,000 lbs at P1.20 240,000
Direct materials used - 110,000 lbs at P1.20 132,000
Direct labor - 6,000 hours at P14 84,000
Factory overhead 111,000
) ) ) ) ) ) ) ) ) FOUR VARIANCE METHOD
) ) ) ) ) ) ) ) )
A.Variable Overhead Variance
Solution
Variable Spending Variance
Actual variable factory overhead P 36,000
Less: Actual hours x VO rate (6,000 DLHrs. X P5) 30,000
Variable spending variance-unfavorable P 6,000

Variable Efficiency variance

Actual hours x variable overhead rate P 30,000
Less: Std. hrs. x VO rate (50,000 x .10 x P5) 25,000
Variable Efficiency variance-unfavorable P 5,000
 OVERHEAD VARIANCE
) ) ) ) ) ) ) ) )
) ) ) ) ) ) ) ) )
4. Four Variance Method
B.Fixed Overhead Variance

Formula

1. Fixed Spending Variance

Actual Fixed Overhead xxx

Less: Budgeted Fixed Overhead at Normal Capacity xxx
Fixed Spending Variance xxx

2.Volume Variance

Budgeted Fixed Overhead at Normal Capacity xxx

Less: Standard Hours x Fixed Overhead Rate xxx
Volume Variance xxx
) ) ) ) ) ) ) ) )
ILLUSTRATION
) ) ) ) ) ) ) ) )

Last September, the following events took place at ANA MANA Company.
a.Produced 50,000 plastic microcomputer cases
b.Standard variable costs per unit (per case)
Direct materials; 2 pounds at P1.00 P2.00
Direct labor; 0.10 hours at P15 P1.50
Variable manufacturing overhead, 0.10 hrs at P5 P0.50
c.Fixed manufacturing overhead cost
Monthly budget - for 40,000 cases or 4,000 standard hours P80,000
d.Actual production costs
Direct materials purchased 200,000 lbs at P1.20 240,000
Direct materials used - 110,000 lbs at P1.20 132,000
Direct labor - 6,000 hours at P14 84,000
Factory overhead 111,000
) ) ) ) ) ) ) ) ) FOUR VARIANCE METHOD
) ) ) ) ) ) ) ) )
B.Fixed Overhead Variance
Solution
Fixed Spending variance
Actual fixed overhead P 75,000
Less: Budgeted fixed overhead at normal 80,000
Capacity Fixed spending variance-favorable (P 5,000)

Volume variance
Budgeted fixed overhead at normal capacity P 80,000
Less: Std. hours x Fixed OH rate (5,000 x P20) 100,000
Volume variance-favorable (P 20,000)
) ) ) ) ) ) ) ) )
) ) ) ) ) ) ) ) )
ANALYSIS OF FACTORY OVERHEAD

Controllable Variance P6,000

U Volume Variance (20,000) F
Total Factory Overhead Variance(P14,000) F Total Factory Overhead Variance (P14,000)
F
01
02

LVariable Spending Variance P6,000 U

Fixed Spending Variance (5,000) F
Efficiency Variance 5,000 U
04
Volume Variance (20,000)F
03
Total Factory Overhead Variance (P14,000) Spending Variance P1.000 U
F Efficiency Variance 5,000
U Volume Variance (20,000) F
Total Factory Overhead Variance (P14,000)
F
) ) ) ) ) ) ) ) )
) ) ) ) ) ) ) ) )
Standard
Costing

TOTAL MATERIAL VARIANCE TOTAL LABORVARIANCE

QUANTITY
PRICE VARIANCE
VARIANCE RATE VARIANCE TIME VARIANCE

MIX VARIANCE YEILDVARIANCE MIX VARIANCE YEILDVARIANCE

) ) ) ) ) ) ) ) ) MATERIAL PRICE ) MIX AND YIELD VARIANCE
) ) ) ) ) ) ) ) )

Formula
Material Price Variance
Actual Price x Actual Mix x Actual Quantity
Less Standard Price x Actual Mix x Actual Quantity

Material Mix Variance

Standard Price x Actual Mix x Actual Quantity
Less Standard Price x Standard Mix x Actual Quantity

Material Yield Variance

Standard Price x Standa0rd Mix x Actual Quantity
Less Standard Price x Standard Mix x Standard Quantity
) ) ) ) ) ) ) ) ) LABOR PRICE ) MIX AND YIELD VARIANCE
) ) ) ) ) ) ) ) )

Formula
Labor Rate Variance
Actual Rate x Actual Mix x Actual Quantity(Hours)
LessStandard Rate x Actual Mix x Actual Quantity(Hours)

Labor Mix Variance

Standard Rate x Actual Mix x Actual Quantity(Hours)
Less Standard Rate x Standard Mix x Actual Quantity (Hours)

Labor Yield Variance

Standard Rate x Standa0rd Mix x Actual Quantity (Hours)
LessStandard Rate x Standard Mix x Standard Quantity (Hours)
) ) ) ) ) ) ) ) )
ILLUSTRATION
) ) ) ) ) ) ) ) )

Habahab Company produces drinks made from Apples, Mango and Grapes. During the month of
April, the following information was made available.
Material Standards for one batch (200pounds) Actual Production and Cost Data: Production
40 batches
Materials: Standard Mix Standard Quality Standard
Price Labor Standards for one batch (200pounds):
Apples (30%) 60 pounds @P7.20 Workers: Standard Mix Standard Rate
Mango (45%) 90 pounds @P4.50 A-Workers 9 hours/12 hours P10.50 per hour
Grapes (25%) 50 pounds @P5.00 B-Workers 3 hours/12 Hours P14.30 per hour
Total 12 hours
Total Actual Quantity Purchased and Used 8,020.0
Labor Actual
pounds Materials: Actual Mix Actual Cost per pound Workers: Actual Mix Actual Price
A-Workers 90% @ P10.50 per hour
Apples (28.50%) @ P7.50
B-Workers 10% @ P14.40 per hour
Mango (45.50%) @ P4.40
Grapes (26.00%) @ P4.95
Total Actual Quantity 500 hours
) ) ) ) ) ) ) ) ) MATERIAL PRICE VARIANCE
) ) ) ) ) ) ) ) )

Solution
Material Price Variance
Actual Price x Actual Mix x Actual Quantity
Apples (7.50 x 28.50% x 8,020) P17,142.74
Mango (4.40 x 45.50% x 8,020) 16,056.04
Grapes (4.95 x 26% x 8,020) 10,321.74
Total P43,520.53
Material Price
Less
Standard Price x Actual Mix x Actual Quantity Variance
Apples (7.20 x 28.50% x 8,020) P16,457.04 P216.54 U
Mango (4.50 x 45.50% x 8,020) 16,420.95
Grapes (5.00 x 26% x 8,020)
10,426.00
Total P43,303.99
) ) ) ) ) ) ) ) ) MATERIAL MIX VARIANCE
) ) ) ) ) ) ) ) )

Solution
Material Mix Variance

Standard Price x Actual Mix x Actual Quantity

Apples (7.20 x 28.50% x 8,020) P16,457.04
Mango (4.50 x 45.50% x 8,020) 16,420.95
Grapes (5.00 x 26% x 8,020)
Material Mix
10,426.00
Total P43,303.99 Variance
(P284.71) F
Less Standard Price x Standard Mix x Actual Quantity
Apples (7.20 x 60/200 x 8,020) P17,323.20
Mango (4.50 x 90/200 x 8,020) 16,240.50
Grapes (5.00 x50/200x 8,020)
10,025.00
Total P43,588.70
) ) ) ) ) ) ) ) ) MATERIAL YIELD VARIANCE
) ) ) ) ) ) ) ) )

Solution
Material Yield Variance

Standard Price x Standard Mix x Actual Quantity

Apples (7.20 x 60/200 x 8,020) P17,323.20
Mango (4.50 x 90/200 x 8,020) 16,240.50
Grapes (5.00 x50/200x 8,020)
Material Yield
10,025.00
Variance
Total P43,588.70
P108.70 U

Less Standard Price x Standard Mix x Standard Quantity

Apples (7.20 x 60/200 x 8,000) P17,280.00
Mango (4.50 x 90/200 x 8,000) 16,200.00
Grapes (5.00 x50/200x 8,000) 10,000.00
Total P43,480.00
) ) ) ) ) ) ) ) ) LABOR RATE VARIANCE
) ) ) ) ) ) ) ) )

Solution
Labor Rate Variance
Actual Rate x Actual Mix x Actual Quantity(Hours)
A (10.50 x 90% x 500) P4,725
B (14.40 x 10% x 500) 720
Total 5,445
Labor Rate
LessStandard Rate x Actual Mix x Actual Variance P5
Quantity(Hours) U
A (10.50 x 90% x 500) P4,725
B (14.30 x 10% x 500) 715
Total 5,440
) ) ) ) ) ) ) ) ) LABOR MIX VARIANCE
) ) ) ) ) ) ) ) )

Solution
Labor Mix Variance
Standard Rate x Actual Mix x Actual Quantity(Hours)
A (10.50 x 90% x 500) P4,725
B (14.30 x 10% x 500) 715
Total P5,440
Labor Mix
Less Standard Rate x Standard Mix x Actual Quantity Variance
(Hours) (P285) F
A (10.50 x 9/12 x 500) P3,937.50
B (14.30 x 9/12 x 500) 1,787.50
Total P5,725
) ) ) ) ) ) ) ) ) LABOR YIELD VARIANCE
) ) ) ) ) ) ) ) )

Solution
Labor Yield Variance
Standard Rate x Standard Mix x Actual Quantity (Hours)
A (10.50 x 9/12 x 500) P3,937.50
B (14.30 x 9/12 x 500) 1,787.50
Total P5,725 Labor Yield
Variance
LessStandard Rate x Standard Mix x Standard Quantity P229 U
(Hours)
A (10.50 x 9/12 x 480) P3,780
B (14.30 x 9/12 x 480) 1,716
Total P 5,496
) ) ) ) ) ) ) ) ) ANY QUESTION?
) ) ) ) ) ) ) ) )

ANG MANGUTANA KAY

MABAGSAK

T T hh aa nn k k
YYo o u u