This document provides an exam for a cost management course. It contains 4 questions that assess understanding of: [1] normal vs standard costing; [2] material and quantity variances; [3] usage variance; and [4] setting standard times and calculating labor variances. For each question, students are asked to explain concepts, perform calculations, and analyze variances. The goal is to evaluate students' comprehension of key cost accounting principles.
This document provides an exam for a cost management course. It contains 4 questions that assess understanding of: [1] normal vs standard costing; [2] material and quantity variances; [3] usage variance; and [4] setting standard times and calculating labor variances. For each question, students are asked to explain concepts, perform calculations, and analyze variances. The goal is to evaluate students' comprehension of key cost accounting principles.
This document provides an exam for a cost management course. It contains 4 questions that assess understanding of: [1] normal vs standard costing; [2] material and quantity variances; [3] usage variance; and [4] setting standard times and calculating labor variances. For each question, students are asked to explain concepts, perform calculations, and analyze variances. The goal is to evaluate students' comprehension of key cost accounting principles.
This document provides an exam for a cost management course. It contains 4 questions that assess understanding of: [1] normal vs standard costing; [2] material and quantity variances; [3] usage variance; and [4] setting standard times and calculating labor variances. For each question, students are asked to explain concepts, perform calculations, and analyze variances. The goal is to evaluate students' comprehension of key cost accounting principles.
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Ateneo de Naga University ACCA107 – Strategic Cost Management
Prelims, September 02, 2020
C. N. Dait
Good luck!
Name: KLARIZA PAULA NG HUA
1. Explain the difference between normal costing and standard costing. 5 points
Normal costing uses actual cost for determining the manufacturing costs of direct labor and direct materials and uses budgeted cost for the overhead. On the other hand, standard costing based its manufacturing cost from the standard set by the entity. Costs for direct material, direct labor, and overhead are all based from the standard.
2. A worker in a facemask manufacturing business has produced 90 pieces of facemask in a day
consuming 20 meters of fabric. One face mask requires 0.2 meter of fabric. The total actual cost of cloth used for this actual output is P960. The total material variance is 60 unfavourable.
a. What is material price variance? 2 points
MPV = AQ(AP-SP)
= 20 (48 - )
b. What is material quantity variance? 2 points
MUV = SP(AQ-SQ) = (48 - )
3. A computer laboratory class in the College of Business and Accountancy of the Ateneo de Naga University is limited to 30 students considering the number of computer units available in the laboratory. Last year first semester, a computer laboratory class has only 25 students.
a. What kind of variance is being illustrated in this particular case? 1 point
Usage variance is being illustrated in this case.
b. Does this result to a favourable or unfavourable variance from the point of view of Ateneo de Naga? 1 point This case results to unfavourable.
c. Explain why is it favourable or unfavourable. 4 points
The case wherein 25 students were only accommodating the laboratory which can hold 30 students will result to an unfavorable variance because the number of computers are not being utilized.
1 Ateneo de Naga University ACCA107 – Strategic Cost Management Prelims, September 02, 2020 C. N. Dait
4. Let us assume that you are part of a team tasked to set a standard time for processing onsite (inside the campus) enrolment of upperclassmen at the Ateneo de Naga University. Assume further that the students have pre-registered subjects.
a. List down your recommended steps for onsite enrolment and indicate the recommended/standard time for each step. 5 points
Procedure Recommended Time
(in minutes) Step 1 Going to respecting department. 5 min Step 2 Encoding of subject. 3 min Step 3 Printing of matriculation form 1 min Step 4 Payment in treasurer’s office. 10 min
b. Assume the standard labor rate per hour is P100 while the actual labor rate per hour is P90, prepare a short problem with solution applying labor variances based on your answer in “a”. You may fill-in the blank spaces in the table below to support your solution.
Short problem given: 4 points
Standard minute for the enrolment is 19 minutes. A student due to unpreceded events, spent 5 min in step 2 which is encoding of subjects. Actual minutes for the enrolment is said to be 21 minutes. Labor variance will be computed by this: LRV = AH (AR –SR) LEV = SR (AH - SH) = 0.32 (90 - 100) = 90 (0.32 – 0.35) = 3.2 favorable = 2.7 unfavorable Total labor variance = 3.2 -2.7 = 0.5 favorable
Hours* Rate per hour Amount
Actual 0.32 hours 90 28.8 Standard 0.35 hours 100 35 Total *Total time in hours for the entire enrolment procedure.
Short problem solution:
b-1) What is labor rate variance? 3 points
LRV = AH (AR –SR)
= 0.32 (90 - 100) = 3.2 favorable
2 Ateneo de Naga University ACCA107 – Strategic Cost Management Prelims, September 02, 2020 C. N. Dait b-2)What is labor efficiency variance? 3 points
