PROBLEM NO. 1:

Target Co. uses a standard costing system in the manufacture of its single product. The 35,000 units of materials in inventory were purchased for P105,000, and two units of raw materials are required to produce one unit of final product. In April, the company produced 12,000 units of product. The standard allowed for materials was P60,000 and there was an unfavourable quantity variance of P2,500.

1. What is company's standard price for one unit of material? _________
2. How many units of materials used to produce April total output? _________
3. What is the material price variance for the units used in April? _________

PROBLEM NO. 2:

Extreme Co. manufactures product RRR with the following standard costs of direct materials and direct labor:

Direct materials, 20 yards @ P13.50 per yard P270.00

Direct labor, 4 hours @ P90.00 per hour 360.00

The following information pertains to the month of May:

Direct materials purchased, 18,000 yards @ P13.80 per yard P248,400

Direct labor, 2,100 hours @ P91.50 per hour 192,150

Direct materials used, 9,500 yards

Production during May 500 units

Required: Indicate whether favourable or unfavourable.

1. What is the direct material price variance (based on purchases}? _________
2. What is the material usage variance?________
3. What is the direct labor rate variance? ________
4. What is the direct labor efficiency variance? _________

PROBLEM NO. 3:

Information on Mild Co.'s direct labor costs for the month of August is as follows:

Actual rate P7.50

Standard hours 11,000

Actual hours 10,000

Direct labor price variance - unfavourable P5,000

What was the standard rate for August? _________

PROBLEM NO. 4:

Strong Co. uses a standard cost accounting system. The following factory overhead and production data are available for May:

Standard xed overhead rate per direct labor hour Standard variable overhead rate per direct labor hour Budgeted monthly direct labor hours Actual direct labor hours worked Standard direct labor hours allowed for actual production Overall overhead variancefavorable Standard direct manufacturing labor hours per unit 2 Actual direct manufacturing labor hours 10,500 Number of units produced 5,000 Standard variable overhead per standard direct P3.00 manufacturing labor hour Actual variable overhead P82,000