Drifblim Fine Furniture Inq Drifblim Fine Furniture Inc manufactures house decors. Brass sculptures are its best seller. The normal selling price of a piece of sculpture is P3,000. Drifblim has total assets amounting to P2,500,000 and liabilities of P1,500,000. Cost structure of the firm: • Fixed Costs: producing and marketing their pieces brass of sculptures is P500,000 • Variable costs per unit are the manufacturing costs (materials, labor and overhead) and marketing costs of P400. Production data: After careful study of the production processes, it was determined that manufacturing overhead was closely related to material usage. Thus manufacturing overhead to production is allocated based on pounds of materials used. The following are the production standards: (5) Labor Efficiency Variance (6) Variable MOH Rate Variance (7) Input 0.3 lb at P100/lb 1.2 hrs at P200/hr P60/lb x 0.3 lb Direct Material (brass) Direct Labor Variable Manufacturing overhead Actual results for August 2022 are as follows: Production Direct Material Purchased Direct Materials Used Direct Labor Variable Manufacturing overhead As a management accountant and business analyst for Drifblim, the undertakings are as follows: A. Variance Analysis. Ascertain whether each is favorable (F) or unfavorable (U) and recommendations for improvement. Variable MOH Efficiency Variance: 35,000 sculptures 12,000 lb at P110/lb 10,450 lbs Cost/ Sculpture 38,500 hrs for P8,085,000 P641,500 30.00 240.00 18.00
Drifblim Fine Furniture Inq Drifblim Fine Furniture Inc manufactures house decors. Brass sculptures are its best seller. The normal selling price of a piece of sculpture is P3,000. Drifblim has total assets amounting to P2,500,000 and liabilities of P1,500,000. Cost structure of the firm: • Fixed Costs: producing and marketing their pieces brass of sculptures is P500,000 • Variable costs per unit are the manufacturing costs (materials, labor and overhead) and marketing costs of P400. Production data: After careful study of the production processes, it was determined that manufacturing overhead was closely related to material usage. Thus manufacturing overhead to production is allocated based on pounds of materials used. The following are the production standards: (5) Labor Efficiency Variance (6) Variable MOH Rate Variance (7) Input 0.3 lb at P100/lb 1.2 hrs at P200/hr P60/lb x 0.3 lb Direct Material (brass) Direct Labor Variable Manufacturing overhead Actual results for August 2022 are as follows: Production Direct Material Purchased Direct Materials Used Direct Labor Variable Manufacturing overhead As a management accountant and business analyst for Drifblim, the undertakings are as follows: A. Variance Analysis. Ascertain whether each is favorable (F) or unfavorable (U) and recommendations for improvement. Variable MOH Efficiency Variance: 35,000 sculptures 12,000 lb at P110/lb 10,450 lbs Cost/ Sculpture 38,500 hrs for P8,085,000 P641,500 30.00 240.00 18.00
Chapter1: Financial Statements And Business Decisions
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Transcribed Image Text:Drifblim Fine Furniture Inc
Drifblim Fine Furniture Inc manufactures house decors. Brass sculptures are its best seller. The normal
selling price of a piece of sculpture is P3,000.
Drifblim has total assets amounting to P2,500,000 and liabilities of P1,500,000.
Cost structure of the firm:
•
Fixed Costs: producing and marketing their pieces brass of sculptures is P500,000
• Variable costs per unit are the manufacturing costs (materials, labor and overhead) and marketing
costs of P400.
Production data:
After careful study of the production processes, it was determined that manufacturing overhead was closely
related to material usage. Thus manufacturing overhead to production is allocated based on pounds of
materials used.
The following are the production standards:
Input
0.3 lb at P100/lb
1.2 hrs at P200/hr
P60/lb x 0.3 lb
Direct Material (brass)
Direct Labor
Variable Manufacturing overhead
Actual results for August 2022 are as follows:
Production
Direct Material Purchased
Direct Materials Used
Direct Labor
Variable Manufacturing overhead
As a management accountant and business analyst for Drifblim, the undertakings are as follows:
(5) Labor Efficiency Variance
(6) Variable MOH Rate Variance
(7) Variable MOH Efficiency Variance:
35,000 sculptures
12,000 lb at P110/lb
10,450 lbs
38,500 hrs for P8,085,000
P641,500
Cost/
Sculpture
A. Variance Analysis. Ascertain whether each is favorable (F) or unfavorable (U) and recommendations
for improvement.
P
P
P
30.00
240.00
18.00
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