The Alpha Company produces toys for national distribution. Standards for a particular toy are: Materials: 12 ounces per unit at 56¢ per ounce. Labor: 2 hours per unit at P2.75 per hour. During the month of December, the company produced 1,000 units. Information for the month follows: Materials: 14,000 ounces were purchased and used at a total cost of P7,140. Labor: 2,500 hours worked at a total cost of P8,000

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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In a detailed solution, compute for:

1. materials price variance

2. labor rate variance

The Alpha Company produces toys for national distribution. Standards for a particular toy are:
Materials: 12 ounces per unit at 56¢ per ounce.
Labor: 2 hours per unit at P2.75 per hour.
During the month of December, the company produced 1,000 units. Information for the month follows:
Materials: 14,000 ounces were purchased and used at a total cost of P7,140.
Labor: 2,500 hours worked at a total cost of P8,000
Transcribed Image Text:The Alpha Company produces toys for national distribution. Standards for a particular toy are: Materials: 12 ounces per unit at 56¢ per ounce. Labor: 2 hours per unit at P2.75 per hour. During the month of December, the company produced 1,000 units. Information for the month follows: Materials: 14,000 ounces were purchased and used at a total cost of P7,140. Labor: 2,500 hours worked at a total cost of P8,000
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