1. The Lahn Company produces and sells a single product. Standards have been established for the product as follows:

Direct materials 5 lbs. @ P3.50/lb. = P17.50/unit

Direct labor 3 hrs. @ P5.50/hr. = P16.50/unit

Actual cost and usage figures for the past month follow:

Units produced 750

Direct materials used 4,000 lbs.

Direct materials purchased P14,400 (4,500 lbs.)

Direct labor cost P11,200 (2,000 hrs.)

Required: journal entries to record:

a. The purchase of raw materials.

b. The usage of raw materials in production.

c. The incurrence of direct labor cost.

1. Lido Company's standard and actual costs per unit for the most recent period, during which 400 units were actually produced, are given below:

Materials:

Standard: 2 ft. at P1.50 per ft. ........ P 3.00

Actual: 2.1 ft. at P1.60 per ft. ........ P 3.36

Direct labor:

Standard: 1.5 hrs. at P6.00 per hr. ..... 9.00

Actual: 1.4 hrs. at P6.50 per hr. ....... 9.10

Variable overhead:

Standard: 1.5 hrs. at P3.40 per hr. ..... 5.10

Actual: 1.4 hrs. at P3.10 per hr. ....... 4.34

Required: From the foregoing information, compute the following variances. Show whether the variance is favorable (F) or unfavorable (U):

a. Material price variance

b. Material quantity variance

c. Direct labor rate variance

d. Direct labor efficiency variance

e. Variable overhead spending variance

f. Variable overhead efficiency variance

1. Vernon Mills, Inc. is a large producer of men's and women's clothing. The company uses standard costs for all of its products. The standard costs and actual costs per unit of product for a recent period are given below for one of the company's product lines:

Standard CostActual Cost

Materials

Standard: 4.0 yards at P5.40 per yard P21.60

Actual: 4.4 yards at P5.05 per yard P22.22

Direct labor:

Standard: 1.6 hours at P6.75 per hour P10.80

Actual: 1.4 hours at P7.30 per hour P10.22

Variable overhead:

Standard: 1.6 hours at P2.70 per hour P 4.32

Actual: 1.4 hours at P3.25 per hour P 4.55

Total cost per unit P36.72 P36.99

During this period, the company produced 4,800 units of this product. A comparison of standard and actual costs for the period on a total cost basis is given below:

Actual costs: 4,800 units at P36.99 P177,552

Standard costs: 4,800 units at P36.72 176,256

Difference in cost--unfavorable P 1,296

There was no inventory of materials on hand at the beginning of the period. During the period, 21,120 yards of materials were purchased, all of which were used in production.

Required:

1. For direct materials, compute the price and quantity variances for the period and prepare journal entries to record all activity relating to direct materials for the period.
2. For direct labor, compute the rate and efficiency variances and prepare a journal entry to record the incurrence of direct labor cost for the period.
3. For variable overhead, compute the spending and efficiency variances.