STANDARD COSTING The Household Company has established standard costs for the cabinet department, in which one size of MX cabinet is made. The standard costs of producing one of these MX cabinets are shown below: Direct material: lumber 50 board feet at P4 200 Direct labor: 8 hours at P10 80 Overhead costs: Variable – 8 hours at P5 40 Fixed – 8 hours at P3 24 Total standard unit cost 344 During June 2019, 500 of these cabinets were produced. The cost of operations during the month is shown below. Direct material purchased: 30,000 board feet at P4.10 Direct materials used: 24,000 board feet Direct labor: 4,200 hours at P9.50 Overhead costs: Variable costs – P22,000 Fixed costs – P11,000 The budgeted overhead for the cabinet department based on normal monthly activity of 4,500 hours is P36,000 of which P22,500 is variable and P13,500 is fixed overhead. REQUIRED: 1. Compute the total, price, and quantity variances for a. materials
The Household Company has established standard costs for the cabinet department, in which one size of MX cabinet is made. The standard costs of producing one of these MX cabinets are shown below:
Direct material: lumber 50 board feet at P4 200
Direct labor: 8 hours at P10 80
Overhead costs: Variable – 8 hours at P5 40
Fixed – 8 hours at P3 24
Total standard unit cost 344
During June 2019, 500 of these cabinets were produced. The cost of operations during the month is shown below.
Direct material purchased: 30,000 board feet at P4.10
Direct materials used: 24,000 board feet
Direct labor: 4,200 hours at P9.50
Overhead costs: Variable costs – P22,000
Fixed costs – P11,000
The budgeted overhead for the cabinet department based on normal monthly activity of 4,500 hours is P36,000 of which P22,500 is variable and P13,500 is fixed overhead.
REQUIRED:
1. Compute the total, price, and quantity variances for
a. materials
b. direct labor
c. manufacturing overhead using
1. Two-way
2. Three-way
3. Four – way
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