7. Materials, Labor and Overhead Variances (Comprehensive Problem, Reconstruction) Standard variable costs per unit: A) Materials: 4 pounds @ (1). B) Direct Labor: (3) hours @ P 12.00 C) Variable overhead: P 8 per direct labor hour Production Materials purchases, 32,000 pounds Materials used at standard prices, 31,200 pounds Direct labor (actual): (6)_ hours Material purchase price variance Material use variance Direct labor rate variance Direct labor efficiency variance Variable overhead spending variance Variable overhead efficiency variance Actual variable overhead cost REQUIRED: Compute for the missing amounts (1) to (10). (2) P 6.00 (4) 8,000 units P 62,000 (5) P 47,200 P 2,000 adverse (7) P 2,000 favorable (8) P 1,500 credit (9) (10)

7. Materials, Labor and Overhead Variances (Comprehensive Problem, Reconstruction) Standard variable costs per unit: A) Materials: 4 pounds @ (1). B) Direct Labor: (3) hours @ P 12.00 C) Variable overhead: P 8 per direct labor hour Production Materials purchases, 32,000 pounds Materials used at standard prices, 31,200 pounds Direct labor (actual): (6)_ hours Material purchase price variance Material use variance Direct labor rate variance Direct labor efficiency variance Variable overhead spending variance Variable overhead efficiency variance Actual variable overhead cost REQUIRED: Compute for the missing amounts (1) to (10). (2) P 6.00 (4) 8,000 units P 62,000 (5) P 47,200 P 2,000 adverse (7) P 2,000 favorable (8) P 1,500 credit (9) (10)

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Description: 7. Materials, Labor and Overhead Variances (Comprehensive Problem, Reconstruction)Standard variable costs per unit:A) Materials: 4 pounds @ (1)B) Direct Labor: (3)hours @ P 12.00C) Variable overhead: P 8 per direct labor hourProductionMaterials purc

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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Question 3 DRS Company showed the following information for the year: Standard variable overhead rate (SVOR) per direct labor hour Standard hours (SH) allowed per unit Actual production in units Actual variable overhead costs | Actual direct labor hours RM3.75 4 15,000 RM222,816 57,200 a) Calculate the standard direct labor hours for actual production. b) Calculate the applied variable overhead. c) Calculate the total variable overhead variance.
Material price variance = (Standard price per gram - Actual price per gram) * Actual quantity of material used = (P5 - P6) * 14000 = P14,000 (Unfavourable) Material efficiency variance = (Standard quantity of materials - Actual material quantity used) * Standard price per gram = (12000 - 14000) * 5 = P10,000 (Unfavourable) Total materials cost variance = Materials price variance + Materials efficiency variance = (P14,000) + (P10,000) = P24,000 (Unfavourable) For Direct labour, Standard labour hours allowed for actual production = Actual units produced * Standard hours per unit = 2000 units * 1.8 hours = 3600 hours Direct labour rate variance = (Standard labour rate - Actual labour rate) * Actual labour hours used = (P100 - P97.5) * 4000 = P10,000 (Favourable) Direct labour efficiency variance = (Standard labour hours - Actual labour hours) * Standard labour rate = (3600 - 4000) * 100 = P40,000 (Unfavourable) Total direct labour cost variance = Direct labour rate variance + Direct…
Use the following information to calculate the materials price variance: Direct material purchased and used (kgs) 30,000 Cost of direct material 84,000 Unfavourable direct materials usage variance 3,000 Standard quantity of direct materials allowed for production (kgs) 29,000 Select one: a. $6,000 U b. $2,800 F c. $6,000 F d. $2,800 U
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2. Acme Inc. has the following information available: Actual price paid for material Standard price for material Actual quantity purchased and used in production Standard quantity for units produced Actual labor rate per hour Standard labor rate per hour Actual hours Standard hours for units produced A. Compute the material price and quantity, and the labor rate and B. C. D. E. unfavorable variances. $1.00 $0.90 100 90 15 $ $ 16 200 220 efficiency variances. Describe the possible causes for this combination of favorable and
If the materials price variance is $3300 F and the materials quantity and labor variances are each $1800 U, what is the total materials variance? a.$3300 F b. $1800 U c. $1500 F d. $4050 U
Required Indicate whether each of the following variances is favorable (F) or unfavorable (U). The first one has been done as an example. Note: Select "None" if there is no effect (1.e., zero variance). Item to Classify Sales volume Sales price Materials cost Materials usage Labor cost Labor usage Fixed cost spending Fixed cost per unit (volume) $ $ $ $ $ Standard 40,100 units 3.61 per unit 3.00 per pound 91,100 pounds 10.10 per hour 61,100 hours 401,000 3.21 per unit $ $ $ $ $ Actual 42,100 units 3.64 per unit 3.10 per pound 90,100 pounds 9.70 per hour 61,900 hours 391,000 3.17 per unit Type of Variance F
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