BARIACTO, DANIELA ROSE G.

08 ACTIVITY 1

BSA601 STRATEGIC COST MANAGEMENT

Requirements:

1. Material purchase price variance (MPPV) & Material usage/quantity variance (MQV)

Actual Price P 4.10

Less: Standard Price (P 4.00)

Difference in Price P 0.10

Multiply: Actual quantity purchased 30,000

Materials price variance- unfavorable P 3,000

Actual quantity used 24,000

Less: Standard quality allowed (500 x 50) 25,000

Difference in quantity 1,000

Multiply: Standard Price x P 4.00

Materials quantity variance- favorable P 4,000

2. Labor rate variance (LRV) & Labor efficiency variance (LEV)

Actual rate per hour P 9.50

Less: Standard rate per hour P 10

Difference in rate per hour P 0.50

Multiply: Actual hours used 4,200

Labor rate variance- favorable P 2,100

Actual hours used 4,200

Less: Standard hours allowed (500 x 8) 4,000

Difference in hours 200

Multiply: Standard rate per hour 10

Labor efficiency variance- unfavorable 2,000

3. Variable overhead (VOH) rate variance & VOH efficiency variance

Actual variable overhead cost P 22,000

Less: Standard variable overhead rate (4,200 x P 5) P 21,000

Variable overhead rate variance- unfavorable P 1,000

Actual hours x variable overhead rate (4,200 x P 5) P 21,000

Less: Standard hours x VO rate (500 x 8 x 5) P 20,000

Variable overhead efficiency variance- unfavorable P 1,000

4. Fixed overhead (FOH) spending variance & FOH volume variance

Actual fixed overhead cost P 11,000

Less: Budgeted fixed overhead (4,500 x 3) P 13,500

Fixed spending variance- favorable P 2,500

Budgeted fixed overhead (4,500 x 3) 13,500

Less: Standard hours (4,000 x 3) 12,000

Fixed volume variance- unfavorable 1,500