Materials:

Price Quantity Total

Actual Costs P 1.38 9,500 P 13,110

Less: Standard Costs 1.35 *10 000 13 500

Change . p .03 U ( !'iOO) F p ( 390) F

* Standard materials per unit is based on actual production (units):

20 yards x 500 units produced= 10,000 standard quantity

Materials< < Materials Purchase = Change in Price x Actual Qty. Purchased .

Price Price Variance = P.03 U x 18,000 ................................ .e..540J,l

Materials Price = Change in Price x Actual Qty. Used

Usage Variance = P.03 Fx 9,500 ......... : .............. : ········ P285 U

Quantity: Materials Quantity/ = Change in Qty. x Standard Price

Usag·e Variance = ( 500) F x P1 .35 ................. ...... ...... . (675) F

Materials Cost Variance.................................................................. Pl390) E

. Note: Change means Actual less Standard.

Journal Entries:

Materials are recorded Materials are recorded

at Standard Price at Actual Price

{Price Variance determinedat the time {Price Variance determined at the time

of purchase) of issue/'-'sage/requisition)

Time of f:>urchase:

Mat. @ Std. Price (P1.35 x 18,000). 24,300 Mat. , @Act. Price (P1.38 x 18,000). 24,.840

MPpV- unf. (P.03 u x 18,000) ....... 540 Accounts Pay. (P1.38 x 18,000) ... 24,840

Accounts Pav. (P1.38 x 18,000) ... 24,840

Time of lssue/Usage!Requisition from

Warehouse:

WP, @ Std. Costs ( P1.35 x 10,000).13,500 WP, @ Std. Costs (P1 . 35 x 10,000) 13,500

MQV- fav. {(500) fx P1 .35]. .. .... .. 675 MpUV - unf (P. 03 u x 9,500) ......

Mat. , @ Std. Price (P1 .35 x 9,500) 12,825 MQVO fav. [(500) f x P1 .35]. ...
Mat., (@Act. Price (P1.38 x 9,500)

Labor:

Rate Efficiency**

Actual Costs P 9.15 2,100

Less: Standard Costs 9.00 * 2 000

.Change p

.15 U 10Q U

* Standard Hours per unit is based on actual production (units):

4 hours per unit x .500 units produced = 2,000 standard hours

**Efficiency may refer also to usage, time (hours).

Total

P 19,215

18 000

p 1 215 U

<

Rate : Labor R.ate Variance= Change in Rate x Actual Hours

=P.15Ux2,100 .................... ............. P 315U

Labor

Efficiency: Labor Efficiency!

Usage!Time Variance = Change in Hours x Std. DL Rate

= 100 U X P 9. .. . . . . . .. . . . . . .. . . .. . . .. .. . . .. 900 U

Labor Cost Variance .............. ........................ .... .................. u

Note: Change means Actual less Standard.

285

675

13,110