Problem 5 (Direct Materials and Direct Labor Variance): The following were taken from the standard cost card of Palawan Corporation: Standard Quantity per Particular Standard Cost unit Direct Materials Direct Labor P 2.00/kilo 4 kilos P 4.00/hour 5 hours The actual result of operation for the recent year includes the following information: Direct materials were purchased at P28,750 resulting to a price variance of P5,750 unfavorable while total direct materials variance amounted to P4,750 unfavorable. Direct labor efficiency variance is P6,000 unfavorable while rate variance is P4,125 unfavorable. Required: 1. How many units were produced during the period? 2. How many kilos of direct materials were actually purchased and used? 3. How much is the actual purchase price per kilo of direct materials? How many direct labor hours were actually utilized during the period? 5. How much is the actual rate per hour of direct labor? 4.
Problem 5 (Direct Materials and Direct Labor Variance): The following were taken from the standard cost card of Palawan Corporation: Standard Quantity per Particular Standard Cost unit Direct Materials Direct Labor P 2.00/kilo 4 kilos P 4.00/hour 5 hours The actual result of operation for the recent year includes the following information: Direct materials were purchased at P28,750 resulting to a price variance of P5,750 unfavorable while total direct materials variance amounted to P4,750 unfavorable. Direct labor efficiency variance is P6,000 unfavorable while rate variance is P4,125 unfavorable. Required: 1. How many units were produced during the period? 2. How many kilos of direct materials were actually purchased and used? 3. How much is the actual purchase price per kilo of direct materials? How many direct labor hours were actually utilized during the period? 5. How much is the actual rate per hour of direct labor? 4.
Survey of Accounting (Accounting I)
8th Edition
ISBN:9781305961883
Author:Carl Warren
Publisher:Carl Warren
Chapter13: Budgeting And Standard Costs
Section: Chapter Questions
Problem 13.5P: Direct materials and direct labor, variance analysis; factory overhead cost variance analysis Route...
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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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