MARICOL Company uses a standard costing system in connection with the manufacture of their product "X". Each unit of finished product contains 2 yards of a direct material. However, a 20% direct material spoilage calculated on input quantities occurs during the manufacturing process. The standard cost of the direct material is P3 per yard. For the month, the company purchased 100,000 yards of the direct material for P350,000 and used 90,000 yards to produce 40,000 units of Material X. Compute price variance, efficiency variance and materials variance

Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter9: Standard Costing: A Functional-based Control Approach
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Problem 28P: Haversham Corporation produces dress shirts. The company uses a standard costing system and has set...
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MARICOL Company uses a standard costing system in connection with the manufacture of their product "X". Each unit of finished product contains 2 yards of a direct material. However, a 20% direct material spoilage calculated on input quantities occurs during the manufacturing process. The standard cost of the direct material is P3 per yard. For the month, the company purchased 100,000 yards of the direct material for P350,000 and used 90,000 yards to produce 40,000 units of Material X. Compute price variance, efficiency variance and materials variance
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