LJ Company has the following information for the third quarter of 2018:
Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
LJ Company has the following information for the third quarter of 2018:
Actual total
Budget formula Php231,000 plus Php1.20 per hour
Spending variance (3-way analysis) Php16,800 unfavorable
Volume variance (2-way analysis) Php10,500 favorable
Over-all factory overhead variance Php12,600 unfavorable
8. Determine the efficiency variance.
A. Php6,300 F C. Php18,900 F
B. Php6,300 UF D. Php18,900 UF
9. Determine the actual hours worked during the 3rd quarter.
A. 127,050 hours C. 87,150 hours
B. 143,850 hours D. 105,875 hours
10. Determine the standard hours needed for the 3rd quarter.
A. 100,625 hours C. 133,350 hours
B. 111,125 hours D. 120,750 hours
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