AAA Company uses the standard cost system. The following information on its direct labor c provided. 75,000 72,500 P10,000 14,500 275,500 Standard direct labor hours Actual direct labur huurs Direct labor efficiency variance (favorable) Direct labor rate variance (favorable) Total payroll 12. What is AAA Company's actual direct labor rate? P0.20 b. P4.00 с. Р3.60 d. P3.80
AAA Company uses the standard cost system. The following information on its direct labor c provided. 75,000 72,500 P10,000 14,500 275,500 Standard direct labor hours Actual direct labur huurs Direct labor efficiency variance (favorable) Direct labor rate variance (favorable) Total payroll 12. What is AAA Company's actual direct labor rate? P0.20 b. P4.00 с. Р3.60 d. P3.80
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
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Question
![AAA Company uses the standard cost system. The following information on its direct labor costs are
provided.
Standard direct labor hours
75,000
72,500
P10,000
14,500
275,500
Actual direct labur hours
Direct labor efficiency variance (favorable)
Direct labor rate variance (favorable)
Total payroll
12. What is AAA Company's actual direct labor rate?
PO.20
b. РА.00
с. Р3.60
d. P3.80
AAA Company uses a standard cost system. Information for raw materials for Product RB for the
month of October is as follows:
Standard unit price
Actual purchase price per unit
Actual quantity purchased
Actual quantity used
Standard quantity allowed for actual production
P1.60
P1.55
2,000 units
1,900 units
1,800 units
13. What is the material purchase price variance?
a. P90 favorable b. P90 unfavorable
c. P100 favorable
d. P100 unfavorable
Information on AAA Company's direct materials costs is as follows:
20,000
P40,000
P2.10
P3,000
Actual units of direct materials
Actual direct materials cost
Standard price per unit of direct materials
Direct material efficiency variance (favorable)
14. AAA Company's direct material price variance was
a. P1,000 favorable b. P1,000 unfavorable c. P2,000 favorable d. P2,000 favorable
Home Company manufactures tables with vinyl tops. The standard material cost for the vinyl used per
Type-R table is P7.80 based on six square feet of vinyl at a cost of P1.30 per square foot. A production
run of 1,000 tables in January resulted in usage of 6,400 square feet of vinyi at a cost of P1.20 per
square foot, at a total cost of P7,680.
15. The usage variance resulting from the above production run was
a. P120 favorable
b. P480 unfavorable
c. P520 unfavorable d. P640 favorable
Justine Corporation uses a standard cost system. Direct labor information for product. Ten for the
month of June is as follows:
Standard rate
Actual rate paid
Standard hours allowed for actual production
Labor efficiency variance
P6.00 per hour
P6.10 per hour
1,500 hours
P600 unfavorable
16. What are the actual hours worked?
a. 1,400
b. 1,402
c. 1,598
d. 1,600](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F3a020d7c-1e78-4321-84a2-9435e566927b%2F5b2c5992-ec68-4f0e-856a-7b84ca875b31%2Fuczdmbl_processed.jpeg&w=3840&q=75)
Transcribed Image Text:AAA Company uses the standard cost system. The following information on its direct labor costs are
provided.
Standard direct labor hours
75,000
72,500
P10,000
14,500
275,500
Actual direct labur hours
Direct labor efficiency variance (favorable)
Direct labor rate variance (favorable)
Total payroll
12. What is AAA Company's actual direct labor rate?
PO.20
b. РА.00
с. Р3.60
d. P3.80
AAA Company uses a standard cost system. Information for raw materials for Product RB for the
month of October is as follows:
Standard unit price
Actual purchase price per unit
Actual quantity purchased
Actual quantity used
Standard quantity allowed for actual production
P1.60
P1.55
2,000 units
1,900 units
1,800 units
13. What is the material purchase price variance?
a. P90 favorable b. P90 unfavorable
c. P100 favorable
d. P100 unfavorable
Information on AAA Company's direct materials costs is as follows:
20,000
P40,000
P2.10
P3,000
Actual units of direct materials
Actual direct materials cost
Standard price per unit of direct materials
Direct material efficiency variance (favorable)
14. AAA Company's direct material price variance was
a. P1,000 favorable b. P1,000 unfavorable c. P2,000 favorable d. P2,000 favorable
Home Company manufactures tables with vinyl tops. The standard material cost for the vinyl used per
Type-R table is P7.80 based on six square feet of vinyl at a cost of P1.30 per square foot. A production
run of 1,000 tables in January resulted in usage of 6,400 square feet of vinyi at a cost of P1.20 per
square foot, at a total cost of P7,680.
15. The usage variance resulting from the above production run was
a. P120 favorable
b. P480 unfavorable
c. P520 unfavorable d. P640 favorable
Justine Corporation uses a standard cost system. Direct labor information for product. Ten for the
month of June is as follows:
Standard rate
Actual rate paid
Standard hours allowed for actual production
Labor efficiency variance
P6.00 per hour
P6.10 per hour
1,500 hours
P600 unfavorable
16. What are the actual hours worked?
a. 1,400
b. 1,402
c. 1,598
d. 1,600
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