The Michigan Company has made the following information available for its production facility for the month of
Question:
The Michigan Company has made the following information available for its production facility for the month of June. Fixed overhead was estimated at 19,000 machine hours for the production cycle. Actual machine hours for the period were 18,900, which generated 3,900 units.
Material purchased (80,000 pieces) - P314,000
Material quantity variance - P6,400 U
Machine hours used (18,900 hours)
VOH spending variance - P50 U
Actual fixed overhead - P60,000
Actual labor cost - P40,120
Actual labor hours 5,900
Michigan's standard costs are as follows:
-Direct material 20 pieces @ P4 per piece
-Direct labor 1.5 hours @ P6 per hour
-Variable overhead (applied on a machine hour basis)
4.8 hours @ P2.50 per hour
-Fixed overhead (applied on a machine hour basis)
4.8 hours @ P3 per hour
Determine the following items:
1. material purchase price variance
2. standard quantity allowed for material
3. total standard cost of material allowed
4. actual quantity of material used
5. labor rate variance
6. standard hours allowed for labor
7. total standard cost of labor allowed
8. labor efficiency variance
9. actual variable overhead incurred
10. standard machine hours allowed
11. variable overhead efficiency variance
12. budgeted fixed overhead
13. applied fixed overhead
14. fixed overhead spending variance
15. volume variance
16. total overhead variance