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Below are cost data related to Marlene Manufacturing in producing a unit of product using the standard cost system: Materials - 3 liters @ P20/L

Below are cost data related to Marlene Manufacturing in producing a unit of product using the standard cost system:

Materials - 3 liters @ P20/L

Variable Overhead - 2 hours @ P30/hr

Direct Labor - 2 hours @ P36/hr

Fixed overhead - 2 hours @ P20/hr.

Other information from operations in September are:

Actual production - 11,000 units;

Materials purchased - 50,000 liters @ P19;

Direct labor (23,000 hours) - P869,400;

Depreciation of factory building and equipment - P 100,000;

Sales salaries - P100,000;

Factory Insurance - P20,000;

Sales (9,000 units) - P500;

Indirect labor (Includes P250,000 fixed) - P600,000;

Normal capacity - 10,000 units;

Light (office) - P8,000;

Light and Power (factory includes P40,000 fixed) - P110,000;

Advertising - P80,000;

Materials used - 35,000 liters;

Office supplies used - P5,000;

Administrative salaries - P140,000;

Depreciation (office) - P10,000;

Indirect factory materials used (variable) - P200,000;

Delivery expense - P40,000.

Required:

1. An analysis of the materials, direct labor and factory overhead variance using SVV of the three variance method for factory overhead.

2. Income statement supported by a schedule of variances and treating all variances as period costs.

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