S T R I C T L Y C O N F I D E N T I A L

Module 7:
STANDARD COSTING FOR COST CONTROL
ANSWER KEY

Test 1. TRUE OR FALSE QUESTIONS.

1. T 6. F 11. T 16. F 21. T 26. F

2. F 7. T 12. F 17. T 22. F 27. T
3. T 8. F 13. T 18. F 23. T 28. T
4. F 9. T 14. F 19. T 24. F 29. T
5. T 10. F 15. T 20. F 25. T 30. T

Test 2. MULTIPLE CHOICE QUESTIONS.

1. A 6. C 11. D 16. D 21. B 26. D

2. B 7. A 12. C 17. A 22. A 27. B
3. B 8. D 13. D 18. C 23. C 28. B
4. A 9. A 14. D 19. A 24. C 29. C
5. B 10. A 15. A 20. B 25. A 30. A

Test 3. PRACTICE EXERCISES.

Problem 1

1. ₱336,940 unfavorable; ₱25,600 unfavorable

2. ₱51,500 unfavorable; ₱198,000 unfavorable
3. ₱7,000 favorable; ₱115,200 unfavorable
4. ₱99,500 unfavorable; ₱16,500 unfavorable

C O P Y R E S T R I C T E D F O R I N S T R U C T O R S O N L Y
 S T R I C T L Y C O N F I D E N T I A L

Problem 2

1. ₱93,000 favorable; ₱8,400 unfavorable

2. ₱150,000 unfavorable; ₱120,000 unfavorable
3. ₱30,000 favorable; ₱100,000 unfavorable
4. ₱13,000 unfavorable; ₱60,000 unfavorable
5. Four variances are potentially affected by material quality:
MPV ₱ 93,000 favorable
MUV 8,400 unfavorable
LEV 150,000 unfavorable
VOH efficiency 100,000 unfavorable
₱165,400 unfavorable

If the variance outcomes are largely attributable to the lower-quality materials, then the
company should discontinue using this material.

Problem 3

1. ₱10 variable rate = 2; fixed rate = 8

2. 63,000
3. Variable = ₱6,500 favorable; ₱4,000 unfavorable
Fixed = ₱3,000 unfavorable; ₱24,000 favorable
4. [No computations are necessary.] Only the volume variance would have changed.

Problem 4

Price ₱31,500 unfavorable; Mix ₱15,000 unfavorable; Yield ₱5,250 unfavorable

Problem 5

1. ₱6
2. ₱20,000 unfavorable
3. ₱4,000 favorable
4. 0.54 hour per unit
5. ₱26,000 favorable

Problem 6

1. ₱2.50
2. ₱27,500 unfavorable
3. 14,000

C O P Y R E S T R I C T E D F O R I N S T R U C T O R S O N L Y
 S T R I C T L Y C O N F I D E N T I A L

Problem 7

1. Standard cost sheet:

Direct materials (0.6 lb. @ ₱5)* P3.00
Direct labor (0.20 hr. @ ₱8)** 1.60
Variable overhead (0.20 hr. @ ₱10)** 2.00
Fixed overhead (0.20 hr. @ ₱5)** 1.00
Unit cost ₱7.60
2. ₱1,000 favorable
3. ₱880 favorable
4. 4,800 hours

Problem 8

₱2,690 favorable; ₱91.20 unfavorable; ₱2,308.80 unfavorable

Problem 9

1. ₱1,800 favorable; ₱5,250 unfavorable

2. ₱2,300 favorable; ₱3,500 unfavorable
3. ₱920 unfavorable; ₱1,500 unfavorable

Problem 10

1. Lot 30 = ₱42,450; Lot 31 = ₱70,042.50; Lot 32 = ₱43,920

2.
a. ₱400 unfavorable
b. ₱489.50 unfavorable
c. ₱1,275 unfavorable
d. ₱3,300 unfavorable
e. ₱79.50 unfavorable; ₱1,053 unfavorable

C O P Y R E S T R I C T E D F O R I N S T R U C T O R S O N L Y