31 Bee Company uses a standard cost system in which it applies manufacturing overhead to units of product on the basis of direct labor hours. The information below pertains to a recent month's activity: Denominator (normal) activity Actual activity 300 hours 350 hours Standard hours allowed for output 360 hours Predetermined overhead rate (P 2 variable + P 3 fixed) P 5 per hour What would be the volume variance? * (2 Points) P 300 favorable P 180 favorable P 150 favorable P 120 favorable 32 2 Equivalent units of production (EUP) are equal to the: * (2 Points) number of units worked on during the period by a production department. units completed by a production department in the period. number of whole units that could have been completed if all work of the period had been used to produce whole units. identifiable units existing at the end of the period in a production department. 33 The following data relate to direct labor costs for the current period: Standard costs Actual costs 10,000 hours at P 20 9,800 hours at P 19.50 What was the direct labor efficiency variance? (2 Points) P 3,600 favorable P 3,600 unfavorable P 4,000 favorable P 4,000 unfavorable * 35 If the rework costs were attributable to the exacting specifications of the customer, how much is the cost of Job 100? * (2 Points) During the month of January, DDD Company incurred the following costs on Job 100 for the manufacture of 100 tables: Direct materials Direct labor Factory overhead (150% of direct labor) 6,600 8,000 12,000 At the end of the production, the company determined that there were 10 units defective with the following direct reworking costs: Direct materials Direct labor P29,200 P26,600 P31,600 P21,600 1,000 1,600 36 Company A is producing both product X and Y which is the joint product. After both products slit, the company has the option to sell both at P20 and P30 respectively. However, we will be able to increase the price of Y to P40 per unit if we process further, and it will cost P1,000,000 to get them complete. The quantity of X and Y is 60,000 units and 80,000 units. Should the company sell both products now or process further? * (2 Points) Yes, to take advantage of P200,000 gain No, to avoid loss of P200,000 Yes, to increase total revenue Undetermined 38 To compute equivalent units of production using the FIFO method of process costing, work for the current period must be stated in units * (2 Points) completed during the period and units in ending inventory. completed from beginning inventory, units started and completed during the period, and units partially completed in ending inventory. started during the period and units transferred out during the period. processed during the period and units completed during the period. 39 How much is the Prime Cost? (2 Points) * The work-in-process of Miguel Angelo Corp. follows: Work in Process April 1 Balance P25,000 Direct Materials 50,000 Finished Goods P125.500 Direct Labor Factory Overhead 40,000 30,000 Overhead is applied to production at a predetermined rate based on direct labor cost. The work in process at April 30 represents the cost of Job 456, which has been charged with direct labor cost of P3,000 and Job 789, which has been charged with applied overhead of P2,400. P8,650 P4,650 P13, 300 P14,850 40 *REUSABLE PROBLEM* Which among the products should be processed further? * (2 Points) Starter Corp. manufactures Products J, K, L, and M from a joint process. Additional information were as follows: Product Produced Market Value @ Split-Off If Processed Further Costs Final Sales Value J 6,000 P 80,000 P 7,500 P 90,000 K 5,000 60,000 6,000 70,000 L 4,000 40,000 4,000 50,000 M 3,000 20,000 12,500 30,000 J and K Land M J, K and L all of the products