EXERCISES: STANDARD COSTING with GROSS PROFIT VARIANCE ANALYSIS1. Materials and Labor Variance AnalysisJollibee Company has established the standard for a single unit of its product, CLICK Camera Tripod:Direct materialsDirect labor2.3.3 pieces at P 5 per piece2 hours at P 10 per hourAt the start of July, production of 1,000 units of tripod was budgeted based on normal capacity.At the end of July, actual production was 1,200 units of tripod, which resulted to using 4,000 piecesof materials purchased at P 6 per piece.REQUIRED:1. Based on the BUDGETED production of 1,000 units:A) How many pieces of materials must the company plan to use? (Budgeted quantity)B) How much materials cost is included in the budget? (Budgeted materials cost)Determine the actual cost of materials used.Based on the ACTUAL production of 1,200 units:A) How many pieces of materials should have been used? (Standard quantity)B) How much materials cost should have been incurred? (Standard materials cost)C) How many labor hours should have been spent? (Standard hours)D) How much labor cost should have been incurred? (Standard labor cost)4. Determine the following:A) Materials budget varianceB) Materials standard cost varianceC) Materials quantity varianceD) Materials price variance5. In the following month (August), Jollibee purchased 5,000 pieces at a total cost of P 20,000 whileonly 4,000 pieces were used for production; the standard quantity allowed for the actualproduction was 3,800 pieces. Determine the following:A) Total materials cost varianceB) Materials quantity varianceC) Materials price usage varianceD) Materials purchase price varianceE) A favorable MPV coupled with an unfavorable MQV most likely results froma. Machine efficiency problemsb.Product mix production changesPurchase and use of lower-than-standard quality materialsC.d. Purchase and use of higher-than-standard quality materials6. During July, a total payroll of P 22,000 was paid to laborers, working 2,000 labor hours, to producethe 1,200 units of Tripod. Determine the following:A) Total labor cost varianceB) Labor efficiency varianceC) Labor rate varianceD) What is the most probable reason Jollibee Company would experience an unfavorablelabor rate variance and favorable labor efficiency variance?a. Labor employed was heavily weighted towards higher-paid experienced workersb. Labor employed was heavily weighted towards low-paid unskilled workersC. Workers assigned for the job were replaced by workers from other departmentsd. Defective materials extended the labor hours required to produce a single unit

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Description: EXERCISES: STANDARD COSTING with GROSS PROFIT VARIANCE ANALYSIS1. Materials and Labor Variance AnalysisJollibee Company has established the standard for a single unit of its product, CLICK Camera Tripod:Direct materialsDirect labor2.3.3 pieces at P

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EXERCISES: STANDARD COSTING with GROSS PROFIT VARIANCE ANALYSIS 1. Materials and Labor Variance Analysis Jollibee Company has established the standard for a single unit of its product, CLICK Camera Tripod: . Direct materials Direct labor 3 pieces at P 5 per piece 2 hours at P 10 per hour At the start of July, production of 1,000 units of tripod was budgeted based on normal capacity. At the end of July, actual production was 1,200 units of tripod, which resulted to using 4,000 pieces of materials purchased at P 6 per piece. REQUIRED: 1. Based on the BUDGETED production of 1,000 units: A) How many pieces of materials must the company plan to use? (Budgeted quantity) B) How much materials cost is included in the budget? (Budgeted materials cost) Determine the actual cost of materials used. 2. 3. Based on the ACTUAL production of 1,200 units: A) How many pieces of materials should have been used? (Standard quantity) B) How much materials cost should have been incurred? (Standard materials cost) C) How many labor hours should have been spent? (Standard hours) D) How much labor cost should have been incurred? (Standard labor cost)

EXERCISES: STANDARD COSTING with GROSS PROFIT VARIANCE ANALYSIS 1. Materials and Labor Variance Analysis Jollibee Company has established the standard for a single unit of its product, CLICK Camera Tripod: . Direct materials Direct labor 3 pieces at P 5 per piece 2 hours at P 10 per hour At the start of July, production of 1,000 units of tripod was budgeted based on normal capacity. At the end of July, actual production was 1,200 units of tripod, which resulted to using 4,000 pieces of materials purchased at P 6 per piece. REQUIRED: 1. Based on the BUDGETED production of 1,000 units: A) How many pieces of materials must the company plan to use? (Budgeted quantity) B) How much materials cost is included in the budget? (Budgeted materials cost) Determine the actual cost of materials used. 2. 3. Based on the ACTUAL production of 1,200 units: A) How many pieces of materials should have been used? (Standard quantity) B) How much materials cost should have been incurred? (Standard materials cost) C) How many labor hours should have been spent? (Standard hours) D) How much labor cost should have been incurred? (Standard labor cost)

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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