o., the consultant of MARISOL Co. had summarized the following stadard cost data extracted from the historical records and performance reports issued by the costcounting department in the prior year to assist in her analysis and evaluation of the standart coating policy of the company: Input required Standard Cost per Standard cost DM 6 kg per unit P90/kg P540 DL 5 hours per unit P50/hr P250 Other information follows: Budgeted factory overhead for the year: Variable 480,000 Fixed 600,000 -The company's norme capacity p month is 400 units -Actual cost materials purchased for the year is P2,342,000 -During the year, direct materials purchased is 26,880 kg while direct materials actually used is 24,760 kgs -Actual labor costs for GRADED year 1,080,000 of which 24,900 direct labor hours was - Actual fa
o., the consultant of MARISOL Co. had summarized the following stadard cost data extracted from the historical records and performance reports issued by the costcounting department in the prior year to assist in her analysis and evaluation of the standart coating policy of the company: Input required Standard Cost per Standard cost DM 6 kg per unit P90/kg P540 DL 5 hours per unit P50/hr P250 Other information follows: Budgeted factory overhead for the year: Variable 480,000 Fixed 600,000 -The company's norme capacity p month is 400 units -Actual cost materials purchased for the year is P2,342,000 -During the year, direct materials purchased is 26,880 kg while direct materials actually used is 24,760 kgs -Actual labor costs for GRADED year 1,080,000 of which 24,900 direct labor hours was - Actual fa
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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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.
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MARISSA Co., the consultant of MARISOL Co. had summarized the following stadard cost data extracted from the historical records and performance reports issued by the costcounting department in the prior year to assist in her analysis and evaluation of the standart coating policy of the company:
Input required Standard Cost per Standard cost
DM 6 kg per unit P90/kg P540
DL 5 hours per unit P50/hr P250
Other information follows:
Budgeted factory overhead for the year:
Variable 480,000
Fixed 600,000
-The company's norme capacity p month is 400 units
-Actual cost materials purchased for the year is P2,342,000
-During the year, direct materials purchased is 26,880 kg while direct materials actually used is 24,760 kgs
-Actual labor costs for GRADED year 1,080,000 of which 24,900 direct labor hours was
- Actual factory overhead amounted to 1,320,000, 65% of which is fixed cost, FOH is based on labor hours
-Actual production during the year 5,150 units
1. Compute for Spending Variance
2. Compute for Variable Overhead Efficiency Variance
3. Compute for Controllable Variance
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