Determine the following items: h. labor efficiency variance i. actual variable overhead incurred j. standard machine hours allowed k. variable overhead efficiency variance

Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
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MagneticCompany has made the following information available for its production facility for the current month. Fixed overhead was estimated at 19,000 machine hours for the production cycle. Actual machine hours for the period were 18,900, which generated 3,900 units.

 

Material purchased (80,000 pieces)

P314,000

 

Material quantity variance

P6,400

U

Machine hours used (18,900 hours)

 

 

VOH spending variance

P50

U

Actual fixed overhead

P60,000

 

Actual labor cost

P40,120

 

Actual labor hours

5,900

 

Magnetic Company’s standard costs are as follows:

 

Direct material

20 pieces @ P4 per piece

Direct labor

1.5 hours @ P6 per hour

Variable overhead

 

   (applied on a machine hour basis)

4.8 hours @ P2.50 per hour

Fixed overhead

 

   (applied on a machine hour basis)

4.8 hours @ P3 per hour

Determine the following items:

h.

labor efficiency variance

i.

actual variable overhead incurred

j.

standard machine hours allowed

k.

variable overhead efficiency variance

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