Joseph Company uses a standard process costing system in accounting for its one product, which is produced in one department. Inspection takes place at the end of the process, and any spoiled units revealed by inspection are considered abnormal and complete as to all cost elements. All materials are added at the beginning of the process while conversion costs are incurred uniformly throughout the process. Standard costs are as follows: Materials: 6 square meters @ P0.33 Direct labor: ½ hour @ P5.25 Variable factory overhead: ½ hour @ P1.00 Fixed factory overhead: ½ hour @ P1.50 Normal capacity is 17,500 direct labor hours per month. Actual data for November: a. Beginning work in process inventory – 5,000 units (40% converted) b. Started in process during the month – 30,000 units c. Spoiled during November – 1,000 units d. Ending work in process inventory – 2,000 units (80% converted) e. Actual costs incurred: Materials purchased 200,000 square meters @ P0.32 Materials used 184,000 square meters Direct labor 16,000 hours @ P5.30 Variable factory overhead P17,000 Fixed factory overhead P25,000 Required: Using FIFO costing, compute the following: 1. Direct materials price variance 2. Direct materials usage variance. 3. Direct labor rate variance.
Joseph Company uses a standard
Materials: 6 square meters @ P0.33
Direct labor: ½ hour @ P5.25
Variable factory
Fixed factory overhead: ½ hour @ P1.50
Normal capacity is 17,500 direct labor hours per month.
Actual data for November:
a. Beginning work in process inventory – 5,000 units (40% converted)
b. Started in process during the month – 30,000 units
c. Spoiled during November – 1,000 units
d. Ending work in process inventory – 2,000 units (80% converted)
e. Actual costs incurred:
Materials purchased 200,000 square meters @ P0.32
Materials used 184,000 square meters
Direct labor 16,000 hours @ P5.30
Variable factory overhead P17,000
Fixed factory overhead P25,000
Required: Using FIFO costing, compute the following:
1. Direct materials price variance
2. Direct materials usage variance.
3. Direct labor rate variance.
4. Direct labor efficiency variance.
5. Factory overhead spending variance.
6. Factory overhead idle capacity variance.
7. Factory overhead efficiency variance.
8. Factory overhead controllable variance.
9. Factory overhead volume variance.
10. Factory overhead fixed
11. FOH variable spending variance.
12. FOH fixed efficiency variance.
13. FOH variable efficiency variance.
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