Answered: Input required per unit Standard cost…

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter4: Activity-based Costing

Section: Chapter Questions

Problem 2BE: Multiple production department factory overhead rates The total factory overhead for Bardot Marine...

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	Input required per unit	Standard cost per unit	Standard cost per unit
Direct Materials	6 kg per unit	P90 per kg	P540
Direct Labor	5 hours per unit	P50 per hour	P250

Other information follows:

Budgeted factory overhead for the year:

Variable 480,000
Fixed 600,000

The company's normal capacity per 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 the year 1,080,000 of which 24,900 direct labor hours was consumed

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

Compute for Spending Variance

Definition Definition System of assigning an estimated cost to the product (instead of the actual cost) so that the product cost can be determined well in advance and the pricing of the product can be done on time. Since the actual cost cannot be predicted at the initial stage of the production process, the estimated cost is recorded in the books. Any deviation of the estimated cost of the actual cost is adjusted in the books at the end of the period.

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