Mandy Co. adopted a standard cost system several years ago. The standard costs for the prime costs of its single product follow: Material: 10 kg @ P4.50/kg Labor: 6 hours @ P8.50/hr P45.00 P51.00 The following operating data were taken from the records for November: Units completed Budgeted output Materials purchased Total actual labor costs 5,800 units 6,000 units 60,000 kg P306,600 36,500 hours P2,250 unfavorable Actual hours of labor Material usage variance Total material variance P450 unfavorable
Mandy Co. adopted a standard cost system several years ago. The standard costs for the prime costs of its single product follow: Material: 10 kg @ P4.50/kg Labor: 6 hours @ P8.50/hr P45.00 P51.00 The following operating data were taken from the records for November: Units completed Budgeted output Materials purchased Total actual labor costs 5,800 units 6,000 units 60,000 kg P306,600 36,500 hours P2,250 unfavorable Actual hours of labor Material usage variance Total material variance P450 unfavorable
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter9: Evaluating Variances From Standard Costs
Section: Chapter Questions
Problem 5BE: Standard cost journal entries Bellingham Company produced 15,000 units that require 2.5 standard...
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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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a. Compute for the actual cost paid per kilogram
b. Compute for the Labor Efficiency Variance
Transcribed Image Text:Exercise 9-6: DIRECT MATERIALS and DIRECT LABOR VARIANCE
Mandy Co. adopted a standard cost system several years ago. The standard costs for the
prime costs of its single product follow:
Material: 10 kg @ P4.50/kg
Labor: 6 hours @ P8.50/hr
P45.00
P51.00
The following operating data were taken from the records for November:
Units completed
Budgeted output
Materials purchased
5,800 units
6,000 units
60,000 kg
P306,600
Total actual labor costs
36,500 hours
P2,250 unfavorable
P450 unfavorable
Actual hours of labor
Material usage variance
Total material variance
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