Exercise 6-14 Silva Plastics Company has established standard cost for a unit of manufactured product as follows: Materials (3 kgs. @ P9) Labor (1 hour @ P84) Variable overhead (1 hour @ P24) Fixed overhead (1 hour @ P36) P27.00 84.00 24.00 36.00 P171.00 Total standard unit cost At normal operating capacity, 100,000 units of product should be manufactured in a year. Costs data pertaining to the operations for the year are summarized below: Materials purchased (200,000 kgs.) Materials used in production P1,908,000 185,000 kgs. Labor hours 58,000 Labor rate P90.00 per hour P1,380,000 Factory overhead- Variable Fixed P3,600,000 During the year, 60,000 units of product were put into production and were completed. There were no units in process at the beginning or at the end of the year. There are also no inventories of raw materials or finished goods at the beginning of the year. REQUIRED: 1. Determine the materials and labor variances graphically and by formula. 2. Prepare the flexible overhead budget using the format of page 217. 3. Determine the overhead variances using the 2-way method,
Exercise 6-14 Silva Plastics Company has established standard cost for a unit of manufactured product as follows: Materials (3 kgs. @ P9) Labor (1 hour @ P84) Variable overhead (1 hour @ P24) Fixed overhead (1 hour @ P36) P27.00 84.00 24.00 36.00 P171.00 Total standard unit cost At normal operating capacity, 100,000 units of product should be manufactured in a year. Costs data pertaining to the operations for the year are summarized below: Materials purchased (200,000 kgs.) Materials used in production P1,908,000 185,000 kgs. Labor hours 58,000 Labor rate P90.00 per hour P1,380,000 Factory overhead- Variable Fixed P3,600,000 During the year, 60,000 units of product were put into production and were completed. There were no units in process at the beginning or at the end of the year. There are also no inventories of raw materials or finished goods at the beginning of the year. REQUIRED: 1. Determine the materials and labor variances graphically and by formula. 2. Prepare the flexible overhead budget using the format of page 217. 3. Determine the overhead variances using the 2-way method,
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Please help me to answer the required 2. I also uploaded the example format that was given to me. Thank you so much.
Transcribed Image Text:Flexible Overhead Budget
Example of Flexible
overhead budget
Normal
Rate/Hr.
Normal
Time
Actual
Standard
XNormal production
x Actual production
1.2 hrs.
Time
Time
2,500 prs.
1.2 hrs.
2,800 prs.
3,360
HOURS
3,000
3,200
Fixed overhead
Variable overhead
Total overhead
P10.00
40.00
P50.00
P30,000
120,000
P150,000
P30,000
128,000
P158,000
P30,000
134,400
P164,400
Transcribed Image Text:Exercise 6-14
Silva Plastics Company has established standard cost for a unit of manufactured
product as follows:
Materials (3 kgs. @ P9)
Labor (1 hour @ P84)
Variable overhead (1 hour @ P24)
Fixed overhead (1 hour @ P36)
P27.00
84.00
24.00
36.00
Total standard unit cost
P171.00
At normal operating capacity, 100,000 units of product should be manufactured
in a year. Costs data pertaining to the operations for the year are summarized below:
Materials purchased (200,000 kgs.)
Materials used in production
P1,908,000
185,000 kgs.
58,000
P90.00 per
Labor hours
hour
Labor rate
P1,380,000
Factory overhead- Variable
Fixed
P3,600,000
During the year, 60,000 units of product were put into production and were
completed. There were no units in process at the beginning or at the end of the year.
There are also no inventories of raw materials or finished goods at the beginning of
the year.
REQUIRED:
1. Determine the materials and labor variances graphically and by formula,
2. Prepare the flexible overhead budget using the format of page 217.
3. Determine the overhead variances using the 2-way method.
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