Silva Plastics Company has established standard cost for a unit of manufactured product as follows: Materials (3 kgs. @ P9) Labor (1 hour @ P84) Variable overhead (1 hour @ P24) Fixed overhead (1 hour @ P36) P27.00 84.00 24.00 36.00 P171.00 Total standard unit cost At normal operating capacity, 100,000 units of product should be manufactured in a year. Costs data pertaining to the operations for the year are summarized below: P1,908,000 Materials purchased (200,000 kgs.) Materials used in production 185,000 kgs. Labor hours 58,000 P90.00 per hour P1,380,000 Labor rate Factory overhead- Variable Fixed P3,600,000 During the year, 60,000 units of product were put into production and were completed. There were no units in process at the beginning or at the end of the year There are also no inventories of raw materials or finished goods at the beginning c the year. REQUIRED: 3. Determine the overhead variances using the 2-way method.

Silva Plastics Company has established standard cost for a unit of manufactured product as follows: Materials (3 kgs. @ P9) Labor (1 hour @ P84) Variable overhead (1 hour @ P24) Fixed overhead (1 hour @ P36) P27.00 84.00 24.00 36.00 P171.00 Total standard unit cost At normal operating capacity, 100,000 units of product should be manufactured in a year. Costs data pertaining to the operations for the year are summarized below: P1,908,000 Materials purchased (200,000 kgs.) Materials used in production 185,000 kgs. Labor hours 58,000 P90.00 per hour P1,380,000 Labor rate Factory overhead- Variable Fixed P3,600,000 During the year, 60,000 units of product were put into production and were completed. There were no units in process at the beginning or at the end of the year There are also no inventories of raw materials or finished goods at the beginning c the year. REQUIRED: 3. Determine the overhead variances using the 2-way method.

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter10: Standard Costing And Variance Analysis

Section: Chapter Questions

Problem 72P: Moleno Company produces a single product and uses a standard cost system. The normal production...

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