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Chapter 7

# Chapter 7

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08/05/2013

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CHAPTER 7STANDARD COSTING and VARIANCE ANALYSIS
[Problem 1]1. Qty.Unit PriceAmountActual17,000 P3.30P56,100Less: Standard (6,000 x 3)18,000 3.00 54,000Variance-UF (F) (1,000)F P0.30 UFP 2,100 UF2.MPV = P0.30 UF x 17,000 = P 5,100 UFMQV = (1,000) F x P3.00 = P(3,000) F[Problem 2]1.Invoice price
[(P50,000/2 tons)
÷
1,000 kgs.]
P25.00 /kgShipping costs
[P10,000/10) / 2,000 kgs.]
(P25 x 5%)
( 1.25 /kg)Standard purchase price `P24.25 /kgStandard purchase price per gram
(P24.25
÷
1,000 grams)
P0.024252.Standard quantity of materials that passes final inspection19 gms.3.Net materials per final good unit 19 grams
÷
Yield rate (1 0.0625) 0.9375Materials input per finished unit 20.27X Adjustment factor for final inspection 20/19Gross materials input per finished unit 21.33 gramsStandard materials cost:Material Eh-Eh = 21.33 gms @ P0.02425 = P0.51725 /unit[Problem 3]1.Standard DL hours (4,400 units x 15/60)1,100 hrs.x Standard DL rate per hourP 12Standard DL costP13,2002. AmountHrs.Rate/ hr.Actual DL costP14,1611.190P11.90Less: Standard DL cost 13,2001.100 12.00DL Cost Variance UF(F)P 961 UF 90 UFP (0.10) F3 LRV = P(0.10) F x 1.190 hrs. = P(119) FLEV = 90 UF x P12.00 = P1.080 UF[Problem 4]1.Standard DLH = 22,000 batches x 2.5 hrs. = 55,000 hrs.2.Standard DLH 55,000 hrs.Change in hrs
. (P24,000 F/ P8)
3,000 F

Actual DLH52,000 hrs3.Standard DL ratesP 8 per houChange in rate
(P55,120 UF/52,000 hrs)
1.06 UFActual DL rateP 9.06Total labor varianceP31,120 UFLabor efficiency variance 24,000 FLabor rate varianceP55,120 UF[Problem 5]1.31,500 oz.7.(P10,150) F2.45,000 hrs.8.(P0.50) F3.(P0.05) F and (P1,500) F9.(P21,500) F4.(P1,400) F10.(P4.89) F5.(3,500) F11.(P22,000) F6.(8,750) F12.(P43,500) Fa.Materials costs variance analyses:Qty.Unit PriceAmountActual 28,000 P2.45P68,600Standard
(4,500 x 7)
31,500 2.50 78,750Variances UF(F) (3,500) FP (0.05) F P(10,150) FMQV = (3,500) F x P2.50 = P(8,750) FMPPV = P(0.05) F x 30,000 oz = P(1,500) FMat. usage price var = P(0.05) F x 28,000 oz = P(1,400) Fb.DL costs variance analyses:Hrs.Rate/ Hr. AmountActual43,000 P10.50P451,500Standard
(4,500 x 10)
45,000 11.00 495,000Variances UF(F) (2,000) FP (0.50) F P(43,500) FLRV = P(0.50) F x 43,000 = P(21,500) FLEV = (2,000) F x P11.00 = P(22,000) FLEV per unit = P(22,000) F
÷
4,500 = P(4.89) F[Problem 6]1.Materials cost variances:Qty.Unit PriceAmountActual
(40,000 – 3,000)
37,000 P0.36P13,320Standard
(6,200 x 6)
37,200 0.40 14,880Variances UF(F) (200)F P(0.04)FP (1,560)FMPPV = P(0.04) F x 40,000 = P(1,600) FMQV = (200) F x P0.40 = (80) F

2. Direct labor costs variances:Qty.Unit PriceAmountActual 8,200 P8.20P67,240Standard
(6,200 x 1.4)
8,680 8.00 69,440Variances UF(F) (480)F P 0.20UFP (2,200)FLRV = P0.20 UF x 8,200 = P1,640 UFLEV = (480) F x P8.00 = (3,840) F[Problem 7]1.Actual variable overheadP56,600Less: Budgeted variable overheadon actual hours
(16,000 hrs x P3.60)
57,600Variable overhead spending varianceP(1,000) F2. Variable efficiency variance is zero. Actual hours and standard hours are equal at16,000 houirs.3.Camarines Norte CorporationVariable Overhead Performance Report(Date)Actual Budget VarianceVariable Overhead CostsActual HoursUF(F)Utilities P21,000 P22,400 P(1,400) FSupplies 3,500 3,200300 UFMaintenance 19,700 19,200 500 UFMiscellaneous 12,400 12,800 (400) FTotals P56,600 P57,600 P(1,000) F[Problem 8]1.(a) (b)at Normal Capacityat Budgeted CapacityVariable overheadP2.20 P2.20Fixed overhead
(P90,000/24,000)
3.75 4.50Total overhead ratesP5.95P6.702.a.Standard hours= [7,000 units x (24,000/8,000)]= 21,000 hrs.b.Normal capacity24,000 hrs.Less: Standard hours21,000Volume variance in hours 3,000 UFX Fixed overhead rate / hourP 3.75Volume variance in pesos P11,250 UF[Problem 9]1.NorthSouthCentralNormal volume22,00040,00041,000Less: Standard hours20,000 38,000 41,000Volume variance in hrs. 2,000 UF 2,000 UF 0X Fixed overhead rate/hr.P 2P 4P 6Volume variance in pesosP4,000 UFP8,000 UFP 0