Problem 11: Materials, Labor and Factory Overhead VariancesJulie Corporation uses a standard cost system and has the following standardvariable costs. Standard Price or RateDirect MaterialsDirect LaborP6.00 per meterVariable Factory OverheadP3.00 per direct labor hourFactory overhead is applied to production based on direct labor hours. Duringthe month of February, 5,000 units were produced and sold to customers. Thefollowing are the selected production data for the month:MaterialsusedDirectVariableLaborFOHStandard Cost allowedActual cost incurredP84,000P75,000P6,000 UP52,500?P21,000P18,000Materials Quantity varianceActual direct labor hours7,500 hoursP3.00/hr.Standard FOH rate per direct labor hourStandard Price per meterP6.00 /m.The difference between the standard and actual cost per unit produced is PO.15favorable.Required: Compute the following:1. The standard cost per unit of product.2. The actual cost per unit of product.Standard Quantity per unit.3.

Name: Problem 11: Materials, Labor and Factory Overhead VariancesJulie Corp
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Description: Problem 11: Materials, Labor and Factory Overhead VariancesJulie Corporation uses a standard cost system and has the following standardvariable costs. Standard Price or RateDirect MaterialsDirect LaborP6.00 per meterVariable Factory OverheadP3.00 pe

Direct material cost variance = Standard cost for actual production - Actual cost = P84,000 -…

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Standard Price or Rate Direct Materials Direct Labor Variable Factory Overhead P6.00 per meter ? P3.00 per direct labor hour Factory overhead is applied to production based on direct labor hours. During the month of February, 5,000 units were produced and sold to customers. The following are the selected production data for the month: Materials Direct Variable used Labor FOH P21,000 P18,000 Standard Cost allowed P84,000 P75,000 P6,000 U P52,500 ? Actual cost incurred Materials Quantity variance Actual direct labor hours 7,500 hours P3.00/hr. Standard FOH rate per direct labor hour Standard Price per meter P6.00 /m. The difference between the standard and actual cost per unit produced is PO.15 favorable. Required: Compute the following: The standard cost per unit of product. 2. The actual cost per unit of product. Standard Quantity per unit. 1. 3.

Standard Price or Rate Direct Materials Direct Labor Variable Factory Overhead P6.00 per meter ? P3.00 per direct labor hour Factory overhead is applied to production based on direct labor hours. During the month of February, 5,000 units were produced and sold to customers. The following are the selected production data for the month: Materials Direct Variable used Labor FOH P21,000 P18,000 Standard Cost allowed P84,000 P75,000 P6,000 U P52,500 ? Actual cost incurred Materials Quantity variance Actual direct labor hours 7,500 hours P3.00/hr. Standard FOH rate per direct labor hour Standard Price per meter P6.00 /m. The difference between the standard and actual cost per unit produced is PO.15 favorable. Required: Compute the following: The standard cost per unit of product. 2. The actual cost per unit of product. Standard Quantity per unit. 1. 3.

FINANCIAL ACCOUNTING

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Chapter1: Financial Statements And Business Decisions

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Concept explainers

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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Problem 11: Materials, Labor and Factory Overhead Variances
Julie Corporation uses a standard cost system and has the following standard
variable costs.

Standard Price or Rate
Direct Materials
Direct Labor
P6.00 per meter
Variable Factory Overhead
P3.00 per direct labor hour
Factory overhead is applied to production based on direct labor hours. During
the month of February, 5,000 units were produced and sold to customers. The
following are the selected production data for the month:
Materials
used
Direct
Variable
Labor
FOH
Standard Cost allowed
Actual cost incurred
P84,000
P75,000
P6,000 U
P52,500
?
P21,000
P18,000
Materials Quantity variance
Actual direct labor hours
7,500 hours
P3.00/hr.
Standard FOH rate per direct labor hour
Standard Price per meter
P6.00 /m.
The difference between the standard and actual cost per unit produced is PO.15
favorable.
Required: Compute the following:
1. The standard cost per unit of product.
2. The actual cost per unit of product.
Standard Quantity per unit.
3.

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