Jollibee Company has established the standard for a single unit of its product, CLICK Camera Tripod:

Direct materials 3 pieces at P 5 per piece

Direct labor 2 hours at P 10 per hour

At the start of July, production of 1,000 units of tripod was budgeted based on normal capacity.

At the end of July, actual production was 1,200 units of tripod, which resulted to using 4,000 pieces

of materials purchased at P 6 per piece.

REQUIRED:

1. Based on the BUDGETED production of 1,000 units:

A) How many pieces of materials must the company plan to use? (Budgeted quantity)

B) How much materials cost is included in the budget? (Budgeted materials cost)

2. Determine the actual cost of materials used.

3. Based on the ACTUAL production of 1,200 units:

A) How many pieces of materials should have been used? (Standard quantity)

B) How much materials cost should have been incurred? (Standard materials cost)

C) How many labor hours should have been spent? (Standard hours)

D) How much labor cost should have been incurred? (Standard labor cost)

4. Determine the following:

A) Materials budget variance

B) Materials standard cost variance

C) Materials quantity variance

D) Materials price variance

5. In the following month (August), Jollibee purchased 5,000 pieces at a total cost of P 20,000 while

only 4,000 pieces were used for production; the standard quantity allowed for the actual

production was 3,800 pieces. Determine the following:

A) Total materials cost variance

B) Materials quantity variance

C) Materials price usage variance

D) Materials purchase price variance

E) A favorable MPV coupled with an unfavorable MQV most likely results from

a. Machine efficiency problems

b. Product mix production changes

c. Purchase and use of lower-than-standard quality materials

d. Purchase and use of higher-than-standard quality materials

6. During July, a total payroll of P 22,000 was paid to laborers, working 2,000 labor hours, to produce

the 1,200 units of Tripod. Determine the following:

A) Total labor cost variance

B) Labor efficiency variance

C) Labor rate variance

D) What is the most probable reason Jollibee Company would experience an unfavorable

labor rate variance and favorable labor efficiency variance?

a. Labor employed was heavily weighted towards higher-paid experienced workers

b. Labor employed was heavily weighted towards low-paid unskilled workers

c. Workers assigned for the job were replaced by workers from other departments

d. Defective materials extended the labor hours required to produce a single unit

2. Materials Price, Mix and Yield Variances

SM-Ayala Merger produces the popular "3N1" Cologne that has gone viral in social media. The merger

has established the following standards for one kilo of "3N1" Cologne:

Ingredients Standard Quantity Standard Unit Cost Standard Cost

Patis 500 grams (50%) P 3.00 P 1,500Toyo 400 grams (40%) P 4.00 P 1,600

Suka 100 grams (10%) P 5.00 P 500TOTAL 1,000 grams (100%) P 3,600The company reported the following production and cost data for the July 2021 operations:Ingredients Actual Quantity Actual Unit Price Actual CostPatis 60,000 P 2.00 P 120,000Toyo 30,000 P 5.00 P 150,000

Suka 10,000 P 4.00 P 40,000TOTAL 100,000 P 310,000SM-Ayala company produced 90 kilos of "3n1" cologne in July 2021. REQUIRED:

1. Total materials cost variance

2. Materials price variance

3. Material mix variance

4. Material yield variance