Sample Problems:1. A company produces a single product that has the following standard costs:MaterialsLaborVariable overhead5 pieces at P4 per piece3 hours at P10 per hour3 hours at P15 per hour3 hours at P5 per hourP20304515Fixed overheadTotal manufacturing costP110The budgeted fixed overhead is P15,000. This is for the budgeted production (the normal capacity level) of 1,000 units requiring totalbudgeted time of 3,000 hours.During the period, the company produced 1,100 units and incurred the following costs:MaterialsLaborVariable overheadFixed overheadTotal5,600 pieces at P3.80 per piece3,250 hours at P11 per hour3,250 hours at 14.50 per hourP21,28035,75047,12516,000P120,155Prepare variance analysis for materials, labor and overhead.

Variance analysis can be defined as investigation tool which studies the deviation between the…

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Business

Accounting

Prepare variance analysis for materials, labor and overhead

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

Sample Problems:
1. A company produces a single product that has the following standard costs:
Materials
Labor
Variable overhead
5 pieces at P4 per piece
3 hours at P10 per hour
3 hours at P15 per hour
3 hours at P5 per hour
P20
30
45
15
Fixed overhead
Total manufacturing cost
P110
The budgeted fixed overhead is P15,000. This is for the budgeted production (the normal capacity level) of 1,000 units requiring total
budgeted time of 3,000 hours.
During the period, the company produced 1,100 units and incurred the following costs:
Materials
Labor
Variable overhead
Fixed overhead
Total
5,600 pieces at P3.80 per piece
3,250 hours at P11 per hour
3,250 hours at 14.50 per hour
P21,280
35,750
47,125
16,000
P120,155
Prepare variance analysis for materials, labor and overhead.

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