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1. Material Variance 2. Direct Labor Costs Variances (Direct 3. Factory Overhead Variance

1. Material Variance 2. Direct Labor Costs Variances (Direct 3. Factory Overhead Variance

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Hackers Corp. presents the following data necessary to perform your task of doing a variance report. Denominator Activity is: Machine Hours 140 hrs. Finished pieces produced 2,800 Standard Costs in connection with this production: Direct materials @ P1.20 P3,360 Direct labor @ PO.1125 315 Factory Overhead (including an allowance for variable overhead at 1,400 the rate of PO.30/piece) Total P5,075 The actual production for a month was: Machin Hours 130 Finished pieces produced 2,860 The actual costs of this production was: Direct Materials P3,575 Direct Labor 286 Factory Overhead, including P573 of fixed overhead 1,573 Total P5,434 Direct labor hours and machine hours are proportional Tasks: Conduct an analysis of the variances and make a recommendation regarding: 1. Material Variance 2. Direct Labor Costs Variances (Direct Labor Rate Variance & Direct Labor Efficiency Variance) 3. Factory Overhead Variance a. Spending Variance b. Variable Efficiency Variance c. Fixed Efficiency Variance d. Idle Capacity Variance Total Manufacturing Overhead Variance - total of "a" to "d" variances e.
Transcribed Image Text:Hackers Corp. presents the following data necessary to perform your task of doing a variance report. Denominator Activity is: Machine Hours 140 hrs. Finished pieces produced 2,800 Standard Costs in connection with this production: Direct materials @ P1.20 P3,360 Direct labor @ PO.1125 315 Factory Overhead (including an allowance for variable overhead at 1,400 the rate of PO.30/piece) Total P5,075 The actual production for a month was: Machin Hours 130 Finished pieces produced 2,860 The actual costs of this production was: Direct Materials P3,575 Direct Labor 286 Factory Overhead, including P573 of fixed overhead 1,573 Total P5,434 Direct labor hours and machine hours are proportional Tasks: Conduct an analysis of the variances and make a recommendation regarding: 1. Material Variance 2. Direct Labor Costs Variances (Direct Labor Rate Variance & Direct Labor Efficiency Variance) 3. Factory Overhead Variance a. Spending Variance b. Variable Efficiency Variance c. Fixed Efficiency Variance d. Idle Capacity Variance Total Manufacturing Overhead Variance - total of "a" to "d" variances e.
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