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Pcpar Standard Costing

This document contains three problems related to standard costing. Problem A provides information about material and labor standards and actual usage for a company. It asks four questions to calculate variances. Problem B provides a similar set of information for another company and asks four more variance questions. Problem C provides overhead information and asks questions to calculate variances using one, two, three, and four variance approaches.

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74 views4 pages

Pcpar Standard Costing

This document contains three problems related to standard costing. Problem A provides information about material and labor standards and actual usage for a company. It asks four questions to calculate variances. Problem B provides a similar set of information for another company and asks four more variance questions. Problem C provides overhead information and asks questions to calculate variances using one, two, three, and four variance approaches.

Uploaded by

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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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STANDARD COSTING

PROBLEM A:The following July information is for Bobb Company:

Standards:
Material 3.0 feet per unit @ P4.20 per foot
Labor 2.5 hours per unit @ P7.50 per hour
Actual:
Production 2,750 units produced during the month
Material 8,700 feet used; 9,000 feet purchased @ P4.50 per foot
Labor 7,000 direct labor hours @ P7.90 per hour

1. What is the material price variance (calculated at point of purchase)?


a. P2,700 U
b. P2,700 F
c. P2,610 F
d. P2,610 U

.2. What is the material quantity variance?


a. P3,105 F
b. P1,050 F
c. P3,105 U
d. P1,890 U

.3. What is the labor rate variance?


a. P3,480 U
b. P3,480 F
c. P2,800 U
d. P2,800 F

.4. What is the labor efficiency variance?


a. P1,875 U
b. P938 U
c. P1,875 U
d. P1,125 U

PROBLEM B: Marcus Company has the following information available for October
when 3,500 units were produced (round answers to the nearest Peso).
Standards:
Material 3.5 pounds per unit @ P4.50 per pound
Labor 5.0 hours per unit @ P10.25 per hour

Actual:
Material purchased 12,300 pounds @ P4.25
Material used 11,750 pounds
17,300 direct labor hours @ P10.20 per hour
.5. What is the labor rate variance?
a. P875 F
b. P865 F
c. P865 U
d. P875 U

6. What is the labor efficiency variance?


a. P2,050 F
b. P2,050 U
c. P2,040 U
d. P2,040 F

.7. What is the material price variance (based on quantity purchased)?


a. P3,075 U
b. P2,938 U
c. P2,938 F
d. P3,075 F

.8. What is the material quantity variance?


a. P2,250 F
b. P2,250 U
c. P225 F
d. P2,475 U

.9. Assume that the company computes the material price variance on the basis
of material issued to production. What is the total material variance?
a. P2,850 U
b. P5,188 U
c. P5,188 F
d. P2,850 F

PROBLEM C: Fast and Furious Corporation Company uses a standard cost system
for its production process and applies overhead based on direct labor hours. The
following information is available for August when Fast and Furious Corporation
made 4,500 units:

Standard:
DLH per unit 2.50
Variable overhead per DLH P1.75
Fixed overhead per DLH 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

.10. Using the one-variance approach, what is the total overhead variance?
a. P6,062.50 U
b. P3,625.00 U
c. P9,687.50 U
d. P6,562.50 U

.11. Using the two-variance approach, what is the controllable variance?


a. P5,812.50 U
b. P5,812.50 F
c. P4,375.00 U
d. P4,375.00 F

.12. Using the two-variance approach, what is the non-controllable variance?


a. P3,125.00 F
b. P3,875.00 U
c. P3,875.00 F
d. P6,062.50 U

.13. Using the three-variance approach, what is the spending variance?


a. P4,375 U
b. P3,625 F
c. P8,000 U
d. P15,750 U

.14. Using the three-variance approach, what is the efficiency variance?

a. P9,937.50 F
b. P2,187.50 F
c. P2,187.50 U
d. P2,937.50 F

.15. Using the three-variance approach, what is the volume variance?


a. P3,125.00 F
b. P3,875.00 F
c. P3,875.00 U
d. P6,062.50 U
16. Using the four-variance approach, what is the variable overhead spending
variance?
a. P4,375.00 U
b. P4,375.00 F
c. P8,750.00 U
d. P6,562.50 U

17. Using the four-variance approach, what is the variable overhead efficiency
variance?
a. P2,187.50 U
b. P9,937.50 F
c. P2,187.50 F
d. P2,937.50 F

18. Using the four-variance approach, what is the fixed overhead spending
variance?
a. P7,000 U
b. P3,125 F
c. P750 U
d. P750 F

.19. Using the four-variance approach, what is the volume variance?


a. P3,125 F
b. P3,875 F
c. P6,063 U
d. P3,875 U

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