SUBJECT: COST ACCOUNTING

 

PROBLEM 1

 

1. How much is the Materials Price Usage Variance?
2. How much is the Materials Price Variance?
3. How much is the Materials Quantity Variance?
4. How much is the Labor Rate Variance?
5. How much is the Labor Efficiency Variance?
6. How much is the Controllable Variance?
7. How much is the Non-Controllable Variance?

Problem 2. Makati Manufacturing Company uses a standard cost system. Engineers have determined that the standard pound of material in one of its specialty product is 20 pounds per unit. The standard direct material costs are P25 per pound. Each unit requires one hour of direct labor time and one hour of machine time. Standard direct labor costs are P50 per hour. The overhead budget formula is P90,000 per month plus P20 per machine hour for normal volume of 18,000 units. A total of 75,000 pounds of materials costing P360,000 were purchased; 70,000 pounds were used. Direct labor incurred for 17,850 hours was P214,200. Actual overhead of P160,000 was incurred in making 18,000 units.