Scribd
Upload
371 views4 pages

ROMERO BSMA1E Standard Costing Exercise

This document contains examples and exercises on calculating different types of variances in standard costing. It includes examples of calculating direct materials, direct labor, variable manufacturing overhead and fixed overhead variances. The variances are calculated based on standard costs and actual results for various companies that produced different levels of units. Formulas and calculations are provided for price, quantity, spending, efficiency and volume variances. Comprehensive exercises calculate all related variances for a given production quantity.

Uploaded by

Aliah Romero
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
371 views4 pages

ROMERO BSMA1E Standard Costing Exercise

This document contains examples and exercises on calculating different types of variances in standard costing. It includes examples of calculating direct materials, direct labor, variable manufacturing overhead and fixed overhead variances. The variances are calculated based on standard costs and actual results for various companies that produced different levels of units. Formulas and calculations are provided for price, quantity, spending, efficiency and volume variances. Comprehensive exercises calculate all related variances for a given production quantity.

Uploaded by

Aliah Romero
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
You are on page 1/ 4

Anne Liah D.

Romero

BMA4301 - BSMA1E

Direct materials variances


Exercise 1. Direct materials variances. ABC Company produced and sold 23,400 units. For
production, it purchased and used 260,000 ounces of ingredients that costs a total of Php10,400. The
standard cost for direct materials are: (1) 10 oz. per unit and (2) 0.05 per oz.

Required:
1. Determine the direct materials price variance. P2,600 F
2. Determine the direct materials quantity variance. P1,300 U
3. Determine the spending variance (price variance and quantity variance). P1,300 F

Direct labor variances


Exercise 2. Direct labor variances. DEF Company produced 25,200 units. Direct labor hours used
during production was 2,800 hours and the Company incurred total direct labor cost of Php28,700. The
standard rate for labor was Php10 per hour and the standard hours needed to finish one unit was 0.10
hours.

Required: Determine the following:


1. The direct labor rate variance (same as price variance). P700 U
2. The direct labor efficiency variance (same as quantity variance). P2,800 U
3. The direct labor spending variance. P3,500 U

Exercise 3. Variable manufacturing overhead variance. GHI Company produced 36,000 units.
Direct labor hours totaled 4,000 hours to produce the units. Actual variable overhead costs amounted to
Php3,600. The variable manufacturing overhead is applied at Php1.00 per direct labor hour and the
standard number of hours to produce one unit is 0.10 hours.

Required: Determine the following:


1. The variable overhead spending variance. Php400F
2. The variable overhead efficiency variance. Php400UF
Exercise 4. Comprehensive. Bianca Company produces a single product. The standard cost card for the
product follows:

Direct materials (4 yards @ Php6 per yard) Php24


Direct labor (1.80 hours @ Php11 per hour) 19.80
Variable manufacturing overhead (1.80 hours @ Php5.20 per
9.36 hour)

During a recent period, the company produced 1,800 units. Various costs associated with the production
of these units are given below:
Direct materials purchased (7,200 yards) Php42,750
Direct materials used in production 7,500 yards
Direct labor cost incurred (2,940 hours) Php28,560
Variable manufacturing overhead cost incurred 15,120

Required: Determine all related variances.


1. DM Price variance. Php450 F
2. DM Quantity variance. Php1,800 UF
3. Labor rate variance. Php3,780 F
4. Labor efficiency variance. Php3,300 F
5. VOH rate variance. Php168 F
6. VOH efficiency variance. Php1,560 F

Page 1 of 3
Standard Costing and Variance Analysis
Exercise 5. FOH variances. MM Corporation has the standard of using 1.5 hours of machine time at a
Php30 rate per hour to produce 1 unit. The predetermined overhead rate was developed using a capacity
of 6,000 units per year. Production is assumed to occur evenly throughout the year.

During one month, the Company produced 525 units. Actual fixed overhead cost incurred amounted to
Php22,800 for 800 hours of machine time.

Required: Determine all related variances.


1. Determine the FOH spending variance. Php300 U
2. Determine the FOH volume variance. Php1,125 F
Exercise. Comprehensive. ABC Company has the following standards for one unit of product:

Direct material: 96 pounds * Php7.20 Php691.20


Direct labor: 3.6 hours * Php20 72
Variable overhead: 1.5 hours of machine time * Php60 108
Fixed overhead: 1.5 hours of machine time * Php36 64.80

The predetermined overhead rates were developed using a capacity of 7,200 units per year. Production
is assumed to occur evenly throughout the year.

During July 2016, the company produced 630 units. Actual data for the month are as follows:

Direct material purchased: 54,000 pounds @ Php7.10


Direct material used: 60,600 pounds (all from July purchases)
Total labor cost: Php29,000 for 1,800 hours
Variable overhead incurred: Php52,500 for 960 hours of machine time
Fixed overhead incurred: Php27,300 for 960 hours of machine time

Required:
1. Direct material variances (price and quantity variances). Php5,400 F ; Php864 U
2. Labor variances (rate and efficiency variances). Php7,000 F ; Php9,360 F
3. VOH variances (spending and efficiency variances). Php5,100 F ; Php900 U
4. FOH variances (spending and volume variances). Php5,100 F ; Php1,620 F
5. Present total overhead variance analysis using one-, two-, and three-variance approaches.

-END-
Page 2 of 3
Standard Costing and Variance Analysis
Illustrative Problem. CRUISE Inc. has the following standards for one unit of product:

Direct material: 320 pcs * Php24 Php7,680


Direct labor: 12 hours * Php64 768
Variable overhead: 6 hours of machine time * Php200 1,200
Fixed overhead: 6 hours of machine time * Php120 720
TOTAL PhP10,368

The predetermined overhead rates were developed using a capacity of 6,000 units per year. Production
is assumed to occur evenly throughout the year.

During January 2017 (first month of operations), the company produced 525 units. Actual data for the
month are as follows:

Direct material purchased: 180,000 pcs @ Php23


Direct material used: 172,000 pcs
Total labor cost: Php398,040 for 6,200 hours
Variable overhead incurred: Php672,000 for 3,200 hours of machine time
Fixed overhead incurred: Php364,800 for 3,200 hours of machine time

Required:
1. Direct material variances (price and quantity variances). U
2. Labor variances (rate and efficiency variances).,360 F
3. VOH variances (spending and efficiency variances). U
4. FOH variances (spending and volume variances). 620 F
5. Present total overhead variance analysis using one-, two-, and three-variance approaches.

Page 3 of 3
Standard Costing and Variance Analysis

You might also like

pFad - Phonifier reborn

Pfad - The Proxy pFad of © 2024 Garber Painting. All rights reserved.

Note: This service is not intended for secure transactions such as banking, social media, email, or purchasing. Use at your own risk. We assume no liability whatsoever for broken pages.


Alternative Proxies:

Alternative Proxy

pFad Proxy

pFad v3 Proxy

pFad v4 Proxy