chapter-7 - This Accounting Materials are brought to you by...

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This Accounting Materials are brought to you by www.everything.freelahat.com CHAPTER 7 STANDARD COSTING and VARIANCE ANALYSIS [Problem 1] 1. Qty. Unit Price Amount Actual 17,000 P3.30 P56,100 Less: Standard (6,000 x 3) 18,000 3.00 54,000 Variance-UF (F) (1,000) F P0.30 UF P 2,100 UF 2. MPV = P0.30 UF x 17,000 = P 5,100 UF MQV = (1,000) F x P3.00 = P(3,000 ) F [Problem 2] 1. Invoice price [(P50,000/2 tons) 1,000 kgs.] P25.00 /kg Shipping costs [P10,000/10) / 2,000 kgs.] 0.50 /kg Trade discount (P25 x 5%) ( 1.25 /kg) Standard purchase price ` P24.25 /kg Standard purchase price per gram (P24.25 1,000 grams) P0.02425 2. Standard quantity of materials that passes final inspection 19 gms. 3. Net materials per final good unit 19 grams Yield rate (1 – 0.0625) 0.9375 Materials input per finished unit 20.27 X Adjustment factor for final inspection 20/19 Gross materials input per finished unit 21.33 grams Standard materials cost: Material Eh-Eh = 21.33 gms @ P0.02425 = P0.51725 /unit [Problem 3] 1. Standard DL hours (4,400 units x 15/60) 1,100 hrs. x Standard DL rate per hour P 12 Standard DL cost P13,200 2. Amount Hrs. Rate/ hr . Actual DL cost P14,161 1.190 P11.90 Less: Standard DL cost 13,200 1.100 12.00 DL Cost Variance – UF(F) P 961 UF 90 UF P (0.10) F 3 LRV = P(0.10) F x 1.190 hrs. = P(119) F LEV = 90 UF x P12.00 = P1.080 UF [Problem 4] 1. Standard DLH = 22,000 batches x 2.5 hrs. = 55,000 hrs. 2. Standard DLH 55,000 hrs. Change in hrs . (P24,000 F/ P8) 3,000 F
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This Accounting Materials are brought to you by www.everything.freelahat.com Actual DLH 52,000 hrs 3. Standard DL rates P 8 per hour Change in rate (P55,120 UF/52,000 hrs) 1.06 UF Actual DL rate P 9.06 Total labor variance P31,120 UF Labor efficiency variance 24,000 F Labor rate variance P55,120 UF [Problem 5] 1. 31,500 oz. 7. (P10,150) F 2. 45,000 hrs. 8. (P0.50) F 3. (P0.05) F and (P1,500) F 9. (P21,500) F 4. (P1,400) F 10. (P4.89) F 5. (3,500) F 11. (P22,000) F 6. (8,750) F 12. (P43,500) F a. Materials costs variance analyses: Qty . Unit Price Amount Actual 28,000 P2.45 P68,600 Standard (4,500 x 7) 31,500 2.50 78,750 Variances – UF(F) (3,500) F P (0.05) F P(10,150) F MQV = (3,500) F x P2.50 = P(8,750) F MPPV = P(0.05) F x 30,000 oz = P(1,500) F Mat. usage price var = P(0.05) F x 28,000 oz = P(1,400) F b. DL costs variance analyses: Hrs. Rate/ Hr. Amount Actual 43,000 P10.50 P451,500 Standard (4,500 x 10) 45,000 11.00 495,000 Variances – UF(F) (2,000) F P (0.50) F P(43,500) F LRV = P(0.50) F x 43,000 = P(21,500) F LEV = (2,000) F x P11.00 = P(22,000) F LEV per unit = P(22,000) F 4,500 = P(4.89) F [Problem 6] 1. Materials cost variances: Qty. Unit Price Amount Actual (40,000 – 3,000) 37,000 P0.36 P13,320 Standard (6,200 x 6) 37,200 0.40 14,880 Variances – UF(F) (200) F P(0.04) F P (1,560) F MPPV = P(0.04) F x 40,000 = P(1,600) F MQV = (200) F x P0.40 = (80) F
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This Accounting Materials are brought to you by www.everything.freelahat.com 2. Direct labor costs variances: Qty. Unit Price Amount Actual 8,200 P8.20 P67,240 Standard (6,200 x 1.4) 8,680 8.00 69,440 Variances – UF(F) (480) F P 0.20 UF P (2,200) F LRV = P0.20 UF x 8,200 = P1,640 UF LEV = (480) F x P8.00 = (3,840) F [Problem 7] 1. Actual variable overhead P56,600 Less: Budgeted variable overhead on actual hours (16,000 hrs x P3.60) 57,600 Variable overhead spending variance P(1,000) F 2. Variable efficiency variance is zero. Actual hours and standard hours are equal at 16,000 houirs. 3. Camarines Norte Corporation Variable Overhead Performance Report (Date) Actual Budget Variance Variable Overhead Costs Actual Hours UF(F) Utilities P21,000 P22,400 P(1,400) F Supplies 3,500 3,200 300 UF Maintenance 19,700 19,200 500 UF Miscellaneous 12,400 12,800 (400) F Totals P56,600 P57,600 P(1,000) F [Problem 8] 1. (a) (b) at Normal Capacity at Budgeted Capacity Variable overhead P2.20 P2.20 Fixed overhead (P90,000/24,000) 3.75 4.50 Total overhead rates P5.95 P6.70 2. a. Standard hours = [7,000 units x (24,000/8,000)] = 21,000 hrs.
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