Question
Mercurial Company has made the following information available for its production facility for the current month. Fixed overhead was estimated at 22,000 machine hours for
Mercurial Company has made the following information available for its production facility for the current month. Fixed overhead was estimated at 22,000 machine hours for the production cycle. Actual machine hours for the period were 22,500; 4,200 units were produced.
Material purchased (107,000 pieces) P529,650
Material quantity variance P7,000 U
Machine hours used (22,500 hours)
VOH spending variance P100 U
Actual fixed overhead P81,000
Actual labor cost P60,300
Actual labor hours 8,500
Mercurial Companys standard costs are as follows:
Direct material 25 pieces @ P5 per piece
Direct labor 2.0 hours @ P7 per hour
Variable overhead (applied on a machine hour basis) 5.2 hours @ P3.00 per hour
Fixed overhead (applied on a machine hour basis) 5.2 hours @ P3.50 per hour
Determine the following items:
e. labor rate variance
f. standard hours allowed for labor
g. total standard cost of labor allowed
h. labor efficiency variance
Step by Step Solution
There are 3 Steps involved in it
Step: 1
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-text-image.webp)
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-subtext-image.webp)
Step: 3
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-subtext-image.webp)
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started