New Era University

College of Accountancy

Assignment No. 6 Part 1

Standard Costs and Variance Analysis

Part I – Theory

1. What is the primary purpose of using a standard cost system?

a. To make things easier for managers in the production facility
b. To provide a distinct measure of cost control
c. To minimize the cost per unit of production
d. To find someone to blame for problems

2. Which of the following statements regarding standard costs is true?

a. Standard costs cannot be used for planning purposes since costs normally change in the future.
b. Standard cost is the industry average cost for a particular item.
c. Setting standard costs is relatively simple because it is done entirely by accountants.
d. Standard costs may be used in either job order costing or process costing.

3. The costing of inventories at standard cost for external financial statement reporting purposes is:
a. in accordance with generally accepted accounting principles if significant differences do not
exist between actual costs and standard costs.
b. in accordance with generally accepted accounting principles if significant differences exist
between actual costs and standard costs.
c. not permitted.
d. preferable to reporting at actual costs.

4. Using standard costs:

(1) can simplify the costing of inventories.
(2) makes employees less “cost-conscious.”
(3) can eliminate the need for the budgeting process.
(4) increases clerical costs.
(5) helps in setting prices.
a. 1, 2, 4 and 5 only c. 1 and 5 only
b. 1, 2 and 3 only d. 3 and 4 only

5. The difference between a budget and a standard is that:

a. a budget expresses a unit amount while a standard expresses a total amount.
b. a budget expresses expected actual costs, while a standard represents what costs should be.
c. a budget expresses management's plans, while a standard reflects what actually happened.
d. standards are excluded from the cost accounting system, whereas budgets are generally
incorporated into the cost accounting system.

6. The final decision as to what standard costs should be is the responsibility of:
a. the quality control engineer.
b. the managerial accountants.
c. the purchasing agent.
d. management.

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7. Which of the following conditions normally would not indicate that standard costs should be
revised?
a. Actual costs differed from standard costs for the preceding week.
b. The engineering department has revised product specifications in responding to customer
suggestions.
c. The company has signed a new union contract which increases the factory wages on average by
P2.00 an hour.
d. The world price of raw materials increased.

8. The most effective efficiency standards are set following a careful study of products and operating
conditions by the:
a. accounting department, central management, and the industrial engineering department.
b. central management and the employees whose performance is being evaluated.
c. accounting department and engineering staff.
d. industrial engineering department and the employees whose performance is being evaluated.

9. Materials and labor cost standards are generally based on:

a. expected actual conditions, anticipated prices, and desired efficiency levels.
b. ideal conditions, present price levels, and desired efficiency levels.
c. normal conditions, present price levels, and desired efficiency levels.
d. capacity conditions, anticipated prices, and desired efficiency levels.

10. If a company is concerned with the potential negative effects of establishing standards, they should:
a. set loose standards that are easy to fulfill.
b. offer wage incentives to those meeting standards.
c. not employ any standards.
d. set tight standards in order to motivate people.

11. A company using very tight (high) standards in a standard cost system should expect that:
a. employees will be strongly motivated to attain the standards.
b. costs will be controlled better than if lower standards were used.
c. most variances will be unfavorable.
d. no incentive bonus will be paid.

12. The term "management by exception" is best defined as:

a. choosing exceptional managers.
b. controlling actions of subordinates through acceptance of management techniques.
c. devoting management time to investigate significant variances whether favorable or unfavorable.
d. controlling costs so that non-zero variances are treated as "exceptional."

13. Management scrutinizes variances because:

a. it is desirable under conventional knowledge on good management.
b. management desires to detect such variances to be able to plan for promotions.
c. management needs to determine the benefits forgone by such variances.
d. management recognizes the need to know why variances happen to be able to make corrective
actions and fairly reward good performers.

14. Which of the following statements concerning variances is true?

a. An extremely favorable variance is not necessarily a good variance.
b. There is a movement in practice toward reporting variances less often than in the past.
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 c. When deciding whether to investigate a variance, managers should consider its magnitude, trend
over time, and whether the variance is favorable or unfavorable.
d. For proper performance evaluation to be made, responsibility for variances should not be traced
to specific managers.

15. Listed below are variances and possible causes that are under review by management of Bebe Co.:
(1) The need to ship goods acquired from a distant supplier via FedEx rather than via truck –
material price variance
(2) The need to complete goods on time during a period of high absenteeism – labor rate variance
(3) A work-team that is very unhappy with its supervisor – labor efficiency variance
(4) The need to close a plant for two days because of blizzard conditions – material quantity
variance, part no. 542
(5) A malfunctioning piece of manufacturing equipment – labor efficiency variance
Which of the following is likely to cause the variance indicated?
a. 1, 2, 3, and 5 only c. 1, 3 and 5 only
b. 1, 2, and 4 only d. 2, 4 and 5 only

16. A company wishing to isolate variances at the point closest to the point of responsibility will
determine its material price variance when:
a. materials are issued to production.
b. materials are used in production.
c. materials are purchased.
d. production is completed.

17. In reviewing the activities of the Mixing Department for the month of January, the department
manager notices that both materials price variance and materials quantity variance are unfavorable.
Which of the following statements concerning the responsibility for these variances is false?
a. The purchasing department is responsible for the unfavorable price variance if the price standard
has been properly set and there is inflation.
b. The production department may be responsible for the unfavorable price variance when the
materials must be ordered on a rush basis at a higher price than planned.
c. The production department is responsible for the unfavorable quantity variance if the variance is
caused by inexperienced workers, faulty machinery, or carelessness.
d. The purchasing department may be responsible for the unfavorable quantity variance if it
purchased raw materials of inferior quality.

18. Tee Company purchased 20,000 pounds of direct material at P0.70 per pound. The standard cost per
pound of material is P0.60 per pound. The journal entry to record the issuance of materials includes:
a. a debit to Materials Price Variance P2,000.
b. a credit to Materials Price Variance of P2,000.
c. a credit to Raw Materials of P0.70 per pound times the number of pounds issued.
d. a credit to Raw Materials of P0.60 per pound times the number of pounds issued.

19. A labor efficiency debit balance indicates that:

a. less labor time was spent on production than was called for by the standard.
b. more labor time was spent on production than was called for by the standard.
c. the wage rate paid to production workers was less the standard.
d. the wage rate paid to production workers was above the standard.

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20. A company would most likely have an unfavorable labor rate variance and a favorable labor
efficiency variance if:
a. workers from another part of the plant were used due to an extra heavy production schedule.
b. the purchasing agent acquired very high quality material that resulted in less spoilage.
c. the mix of workers used in the production process was more experienced than the normal mix.
d. the mix of workers used in the production process was less experienced than the normal mix.

21. The following events occurred at Moon Manufacturing, an assembler of engine parts, during
February. Which of these would most likely result to unfavorable labor efficiency variance?
a. The local municipality raised its property tax rates by 2%.
b. A shoddy maintenance program resulted in an abnormally high number of breakdowns on
machine no. 76 and slowed production.
c. A flu outbreak on the assembly line forced management to use more experienced, senior
personnel to complete production orders on a timely basis. These workers more than made up for
lost time.
d. The implementation of a new program had positive effects for the company with respect to
material usage and worker productivity.

22. Results of operations for the Anderson Company indicated that the actual direct labor rate for the
month of March was P97.50 while the standard rate was P100.00. The general ledger entry to record
the incurrence of direct labor cost would include:
a. a debit to Work-In-Process for the actual number of hours times P97.50 per hour.
b. a debit to Work-In-Process for the standard number of hours times P100.00 per hour.
c. a debit to Work-In-Process for the standard number of hours times P97.50 per hour.
d. a debit to Work-In-Process for the actual number of hours times P100.00 per hour.

23. When machine-hours are used as an overhead cost-allocation base, the most likely cause of a
favorable variable overhead spending variance is:
a. a decline in the cost of energy.
b. excessive machine breakdowns.
c. the production scheduler efficiently scheduled jobs.
d. strengthened demand for the product.

24. An unfavorable variable overhead efficiency variance indicates that:

a. variable overhead items were not used efficiently.
b. the price of variable overhead items was less than budgeted.
c. the variable overhead cost-allocation base was not used efficiently.
d. the denominator level was not accurately determined.

25. A company has a favorable variable overhead spending variance, an unfavorable variable overhead
efficiency variance, and underapplied variable overhead at the end of a period. What is the journal
entry to record these variances and close the variable overhead control account?
a. Debit VOH spending variance; credit VOH efficiency variance; credit variable overhead control
b. Credit VOH spending variance; debit VOH efficiency variance; credit variable overhead control
c. Debit VOH spending variance; credit VOH efficiency variance; debit variable overhead control
d. Credit VOH spending variance; debit VOH efficiency variance; debit variable overhead control

26. A favorable fixed overhead spending variance might indicate that:

a. more capacity was used than planned.
b. the denominator level was less than planned.
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 c. the fixed overhead cost-allocation base was not used efficiently.
d. a plant expansion did not proceed as originally planned.

27. Which of the following statements concerning fixed overhead volume variance is true?
I. The fixed overhead volume variance is most useful in evaluating plant utilization.
II. The fixed overhead volume variance is most significant for purposes of controlling costs.
III. A favorable fixed overhead volume variance occurs if production is greater than planned.
IV. If standard hours allowed for good output equal the predetermined activity level for a given
period, the volume variance will be zero.
a. I, II, III and IV c. I and III only
b. I, III and IV only d. II and IV only

28. Last year, a department's standard costing system reported an unfavorable variable overhead
spending variance and an unfavorable volume variance. The denominator activity level selected for
allocating overhead to the product was based on 80% of capacity. If 100% of capacity had been
selected instead as the denominator level, how would the reported unfavorable (1) spending and (2)
volume variances be affected?
(1) (2) (1) (2)
a. Increased Unchanged c. Increased Increased
b Unchanged Increased d Unchanged Unchanged
. .

29. Spectrum Company prepared its income statement for internal use. How would amounts for cost of
goods sold (COGS) and variances appear?
a. COGS would be at actual costs, and variances would be reported separately.
b. COGS would be combined with the variances, and the net amount reported at standard cost.
c. COGS would be at standard costs, and variances would be reported separately.
d. COGS would be combined with the variances, and the net amount reported at actual cost.

30. The sum of the material mix and material yield variances equals:
a. the material quantity variance.
b. the material purchase price variance.
c. the total material variance.
d. none of the above.

Part II – Problems

1. Holiday Chemical Company uses a standard cost system to collect costs related to the production of
its “bowling ball” fruitcakes. Seven (7) ounces of pecans are included in each bowling ball fruitcake.
Because Holiday wants only the best pecans in its fruitcakes, the pecans they buy are inspected and
some are discarded as unacceptable for fruitcake production. The loss rate is expected to be 1 ounce
of pecans for every 5 ounces inspected. Under traditional standard costing, how many ounces of
pecans should Holiday use as a standard quantity per fruitcake?
a. 8.40 c. 7.80
b 8.75 d 7.20
. .

2. Agas Company is a chemical manufacturer that supplies industrial users. The company plans to
introduce a new chemical solution and needs to develop a standard product cost for this new
solution. The new chemical solution is made by combining a chemical compound (Nyclyn) and a
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 solution (Salex), boiling the mixture, adding a second compound (Protet), and bottling the resulting
solution in 20-liter containers. The initial mix, which is 20 liters in volume, consists of 24 kilograms
of Nyclyn and 19.2 liters of Salex. A 20% reduction in volume occurs during the boiling process.
The solution is then cooled slightly before 10 kilograms of Protet are added; the addition of Protet
does not affect the total liquid volume. The purchase prices of the raw materials used in the
manufacture of this new chemical solution are as follows:
Nyclyn P45.00 per kilogram
Salex P63.00 per liter
Protet P84.00 per kilogram
The total standard materials cost of 20 liters of the product is:
a. P3,702.00. c. P2,503.68.
b. P3,912.00. d. P3,129.60.

3. Stench Foods Company uses a standard cost system to collect costs related to the production of its
garlic flavored yogurt. It takes 15 minutes of labor time to crush enough garlic to fill one container
of yogurt. Because the smell of the garlic can be unbearable, workers are given (and they take it!) 10
minutes of break time every hour (i.e., 50 minutes of work, 10 minutes of break). How many
minutes should Stench use as a standard quantity of labor time per container of yogurt?
a. 17.0 c. 18.0
b 16.2 d 17.5
. .

4. The following direct labor information pertains to the manufacture of product Glu:
Time required to make one unit 2 direct labor-hours
Number of direct labor workers 50 workers
Number of productive hours per week, per worker 40 hours
Weekly wages per worker P5,000
Workers’ benefits treated as direct labor costs 20% of wages
What is the standard direct labor cost per unit of product Glu?
a. P150 c. P300
b P120 d P240
. .

5. The following information relates to product A:

Quantity Unit Price Cost per Unit
Material (kg) 3 P23 P69
Labor (hours) 2 P20 P40
Budgeted and actual production were 1,000 units and 900 units, respectively. Actual inputs were as
follows:
Material 2,650 kg costing P66,250
Labor 1,840 hours costing P34,960
Which of the following statements is false?
a. The material price variance is P4,150 unfavorable.
b. The material usage variance is P1,150 favorable.
c. The labor rate variance is P1,840 favorable.
d. The labor efficiency variance is P800 unfavorable.

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Refer to the following information to answer the next two questions:
Diamond Corporation manufactures a variety of liquid lawn fertilizers, including a very popular
product called Lush 'N Green. Data about Lush 'N Green and Proctol, a major ingredient, follow:
Expected operations:
 Proctol is purchased in 55-gallon drums at a cost of P450 per drum. A 2% cash discount is
offered for prompt payment of invoices, and Diamond takes advantage of all discounts offered.
 Diamond normally purchases 200 drums of Proctol at a time, paying shipping fees of P4,200 per
shipment.
 Each gallon of Lush 'N Green requires three quarts of Proctol; however, because of evaporation
and spills, Diamond loses 4% of all Proctol that enters production. (4 quarts = 1 gallon)
Actual operations:
 For the period just ended, Diamond purchased 1,200 drums of Proctol at a total cost of P549,600.
There was no beginning inventory, but an end-of-period inventory revealed that 15 drums were
still on hand.
 Manufacturing activity output totaled 82,000 gallons of Lush 'N Green.

6. What is the direct material price variance for Proctol?

a. P4,800 favorable c. P9,600 favorable
b P4,800 unfavorable d P9,600 unfavorable
. .

7. What is the direct material quantity variance for Proctol?

a. P30,870 favorable c. P9,345 favorable
b P30,870 unfavorable d P9,345 unfavorable
. .

8. The following standards have been established for a raw material used to produce product G13:
Standard quantity of the material per unit of output 2.3 liters
Standard price of the material P19.00 per liter
The following data pertain to a recent month’s operations:
Actual material purchased 5,100 liters
Actual cost of material purchased P100,725
Actual material used in production 4,700 liters
Actual output 2,040 units of product G13
The entries to record the purchase and use of material will include the following line items, except:
a. Debit Materials Price Variance, P3,825.
b. Debit Work in Process, P89,148.
c. Credit Raw Materials, P89,300.
d. Credit Materials Quantity Variance, P152.

9. A manufacturing company is expected to complete a task in 45 minutes. During a recent accounting

period, 3,200 completed units were produced, resulting in the following labor variances:
Labor rate variance: P5,200 favorable
Labor efficiency variance: P28,000 unfavorable
The standard labor rate is P140 per hour. Which of the following is not correct?
a. The standard hours allowed for the work performed totaled 2,400.
b. The actual hours worked exceeded the standard by 200 hours.
c. The total actual labor cost amounted to P364,000.
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 d. The actual labor rate was P138 per hour.

10. Keith Ventura operates a commercial painting business in Makati, which has a very tight labor
market. Much of his work focuses on newly constructed apartments and townhouses. The following
data relate to crew no. 5 for a recently concluded period when 85 apartment units were painted:
 Three new employees were assigned to crew no. 5. Wages averaged P188 per hour for each
employee; the crew took 2,550 hours to complete the work.
 Based on his knowledge of the operation, articles in trade journals, and conversations with other
painters, Ventura established the following standards:
Typical hourly wage rate of crew personnel: P150
Anticipated crew time for each unit: 34 hours

Which of the following is correct?

I. The standard direct labor cost amounted to P433,500.
II. The direct labor rate variance was P96,900 unfavorable.
III. The direct labor efficiency variance was P51,000 unfavorable.
a. I, II and III c. I and III only
b I and II only d II and III only
. .

Refer to the following information to answer the next three questions:

The Dresden Company uses standard costing for the single product the company makes and sells.
The following data are for the month of April:
Actual cost of direct material purchased and used P62,400
Material price variance P4,800 U
Total materials variance P14,400 U
Standard cost per pound of material P6
Standard cost per direct labor hour P8
Actual direct labor hours 3,800 hours
Labor efficiency variance P1,600 F
Standard number of direct labor hour per unit of product 2
Total labor variance P680 U

11. The total number of units produced during April was:

a. 8,000. c. 3,800.
b 2,000. d 4,000.
. .

12. Which of the following statements is correct?

I. The standard quantity of material allowed to produce one unit of product was 4 pounds.
II. The actual material cost per pound was P7.20.
a. Both I and II c. I only
b Neither I nor II d II only
. .

13. Compute the (1) labor rate variance and the (2) actual direct labor rate per hour.
a. (1) P2,280 U; (2) P8.60 c. (1) P920 U; (2) P8.24
b (1) P2,280 F; (2) P7.40 d (1) P920 F; (2) P7.76
. .
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14. Merle Corporation applies manufacturing overhead to products on the basis of standard machine-
hours. For the most recent month, the company based its budget on 4,000 machine-hours. Budgeted
and actual overhead costs for the month appear below:
Variable overhead costs: Budgeted Costs Actual Costs
Supplies P14,000 P13,150
Indirect labor 27,200 24,390
Fixed overhead costs:
Supervision 19,900 19,540
Utilities 4,700 4,360
Factory depreciation 8,800 8,620
The company actually worked 3,690 machine-hours during the month. The standard hours allowed
for the actual output were 3,620 machine-hours for the month. What was the overall variable
overhead efficiency variance for the month?
a. P721 unfavorable c. P254 unfavorable
b P467 favorable d P880 favorable
. .

15. Mcneeley Footwear Corporation's flexible budget cost formula for supplies, a variable overhead
cost, is P2.94 per unit of output. The company's flexible budget performance report for last month
showed a P4,998 favorable variance for supplies. During that month, 11,900 units were produced.
Budgeted activity for the month had been 12,300 units. The actual costs incurred for indirect
materials must have been closest to:
a. P2.94 c. P2.10
b P2.03 d P2.52
. .

16. Mcgahen Medical Clinic measures its activity in terms of patient-visits. Last month, the budgeted
level of activity was 1,080 patient-visits and the actual level of activity was 990 patient-visits. The
clinic's director budgets for variable overhead costs of P3.30 per patient-visit and fixed overhead
costs of P10,600 per month. The actual variable overhead cost last month was P3,380 and the actual
fixed overhead cost was P8,780. In the clinic's flexible budget performance report for last month,
what would have been the variance for the total overhead cost?
a. P113 U c. P1,707 F
b P297 F d P2,004 F
. .

17. Vermeillen Corporation uses a standard costing system in which variable manufacturing overhead is
assigned to production on the basis of the number of machine setups. The following data pertain to
one month's operations:
Variable manufacturing overhead cost incurred P70,000
Total variable overhead variance P4,550 F
Standard machine setups allowed for actual production 3,550
Actual machine setups incurred 3,500
The variable overhead spending variance is:
a. P1,000 favorable. c. P3,500 favorable.
b P1,000 unfavorable. d P3,500 unfavorable.
. .

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18. The Maxwell Company has a standard costing system in which variable manufacturing overhead is
assigned to production on the basis of machine hours. The following data are available for July:
Actual variable manufacturing overhead cost incurred P22,620
Actual machine hours worked 1,600
Variable overhead spending variance P3,420 U
Total variable overhead variance P4,620 U
The standard number of machine hours allowed for July production is:
a. 2,270 hours. c. 1,700 hours.
b 1,600 hours. d 1,500 hours.
. .

19. Masek Corporation has a standard cost system in which it applies manufacturing overhead to
products on the basis of standard machine-hours (MHs). The company has provided the following
data for the most recent month:
Budgeted level of activity 2,000 MHs
Actual level of activity 2,400 MHs
Cost formula for variable manufacturing overhead cost P5.90 per MH
Budgeted fixed manufacturing overhead cost P50,000
Actual total variable manufacturing overhead P14,880
Actual total fixed manufacturing overhead P49,000
What was the fixed overhead budget variance for the month?
a. P2,360 unfavorable c. P2,360 favorable
b P1,000 unfavorable d P1,000 favorable
. .

20. Rainbow Company uses a standard cost system for its production process. Rainbow Company
applies overhead based on direct labor hours. The following information is available for July:
Standard:
Direct labor hours per unit 2.20
Variable overhead per hour P2.50
Fixed overhead per hour P3.00 based on 11,990 DLHs
Actual:
Units produced 4,400
Direct labor hours 8,800
Variable overhead P29,950
Fixed overhead P42,300
Using the two-variance approach, what is the controllable variance?
a. P12,080 U c. P5,775 U
b P21,650 U d P16,480 U
. .

21. Pizzi, Inc. had the following fixed overhead variances last year:
Fixed overhead budget variance P30,000 unfavorable
Fixed overhead volume variance P6,000 favorable
Pizzi uses machine-hours as an activity base for overhead and used 48,000 machine-hours as the
denominator activity level for the year. Total actual fixed overhead was P150,000. The actual
number of machine-hours incurred was 50,000. The standard hours allowed for actual output is:
a. 40,000. c. 50,400.
b 42,000. d 52,500.
. .
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22. Forrest Company uses a standard cost system for its production process and applies overhead based
on direct labor hours. The following data is available for August when Forrest made 4,500 units:
Standard:
Direct labor hours per unit 2.50
Variable overhead per hour P1.75
Fixed overhead per hour P3.10
Budgeted variable overhead P21,875
Budgeted fixed overhead P38,750
Actual:
Direct labor hours 10,000
Variable overhead P26,250
Fixed overhead P38,000
Using the three-variance approach, what is the spending variance?
a. P8,000 U c. P3,625 F
b P15,750 U d P4,375 U
. .

23. Ferro Enterprises, Inc., uses a standard cost system in which it applies manufacturing overhead to
units of product on the basis of standard direct labor-hours. During the month of September, the
company applied P52,000 in fixed manufacturing overhead cost to units of product. At the end of the
month, manufacturing overhead was overapplied by P3,000. If there was no volume variance in
September, then the budgeted fixed manufacturing overhead cost for the month was:
a. P49,000 c. P55,000
b P52,000 d P58,000
. .

24. Steinhagen Corporation applies manufacturing overhead to products on the basis of standard
machine-hours. Budgeted and actual overhead costs for the most recent month appear below:
Budgeted Costs Actual Costs
Variable overhead costs:
Supplies P 5,460 P 6,570
Indirect labor 3,640 4,410
Fixed overhead costs:
Supervision 9,100 9,450
Utilities 5,980 5,850
Factory depreciation 22,100 22,520
Total overhead cost P46,280 P48,800
The company based its original budget on 2,600 machine-hours. The company actually worked
2,790 machine-hours during the month. The standard hours allowed for the actual output of the
month totaled 2,960 machine-hours. What was the fixed overhead volume variance for the month?
a. P5,148 favorable c. P2,717 favorable
b P5,148 unfavorable d P2,717 unfavorable
. .

25. Norman Enterprises has a standard cost system in which manufacturing overhead is applied to units
of product on the basis of standard direct labor-hours (DLHs). The company has provided the
following data concerning its fixed manufacturing overhead costs for last year:
Total actual fixed overhead cost incurred P42,000
Fixed overhead cost overapplied P6,000
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 Number of units produced 12,500
Volume variance, unfavorable P3,600
Standard labor-hours per unit 1.6 DLHs

The denominator activity level in direct labor-hours last year was:

a. 20,000 c. 22,000
b 21,500 d 23,500
. .

26. Zena Company uses a standard cost accounting system. During February 2014, the company
reported the following manufacturing variances:
Materials price variance P1,600 F
Materials quantity variance 2,400 U
Labor price variance 600 U
Labor quantity variance 2,200 U
Overhead controllable variance 500 F
Overhead volume variance 3,000 U
In addition, 15,000 units of product were sold at P18 per unit. Each unit sold had a standard cost of
P12. Selling and administrative expenses for the month were P10,000. What was the net income for
the month ending February 28, 2014?
a. P83,900 c. P86,100
b P80,000 d P73,900
. .

Refer to the following information to answer the next two questions:

Ultra Shine Company manufactures a cleaning solvent. The company employs both skilled and
unskilled workers. To produce one 55-gallon drum of solvent requires Materials A and B as well as
skilled labor and unskilled labor. The standard and actual material and labor information is presented
below:
Standard:
Material A: 30.25 gallons @ P1.25 per gallon
Material B: 24.75 gallons @ P2.00 per gallon
Skilled Labor: 4 hours @ P12 per hour
Unskilled Labor: 2 hours @ P 7 per hour
Actual:
Material A: 10,716 gallons purchased and used @ P1.50 per gallon
Material B: 17,484 gallons purchased and used @ P1.90 per gallon
Skilled labor hours: 1,950 @ P11.90 per hour
Unskilled labor hours: 1,300 @ P7.15 per hour
During the current month Ultra Shine Company manufactured 500 55-gallon drums.

27. What is the total material mix variance?

a. P3,596 F c. P4,864 F
b P3,596 U d P4,864 U
. .

28. What is the total material yield variance?

a. P2,670 F c. P1,111 F
b P2,670 U d P1,111 U

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 . .

29. What is the total labor mix variance?

a. P1,083 U c. P1,083 F
b. P2,588 U d. P2,588 F

30. What is the total labor yield variance?

a. P1,138 U c. P1,138 F
b P2,583 F d P2,583 U
. .

< END OF QUIZ >

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