Sample Problems:1. A company produces a single product that has the following standard costs:MaterialsLaborVariable overhead5 pieces at P4 per piece3 hours at P10 per hour3 hours at P15 per hour3 hours at P5 per hourP20304515Fixed overheadTotal manufacturing costP110The budgeted fixed overhead is P15,000. This is for the budgeted production (the normal capacity level) of 1,000 units requiring totalbudgeted time of 3,000 hours.During the period, the company produced 1,100 units and incurred the following costs:MaterialsLaborVariable overheadFixed overheadTotal5,600 pieces at P3.80 per piece3,250 hours at P11 per hour3,250 hours at 14.50 per hourP21,28035,75047,12516,000P120,155Prepare variance analysis for materials, labor and overhead.

Variance analysis can be defined as investigation tool which studies the deviation between the…

Answered: Prepare variance analysis for…

Business

Accounting

Prepare variance analysis for materials, labor and overhead

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter8: Standard Costs And Variances

Section: Chapter Questions

Problem 12PA: ABC Inc. spent a total of $48,000 on factory overhead. Of this, $28,000 was fixed overhead. ABC Inc....

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! Required information [The following information applies to the questions displayed below.] Preble Company manufactures one product. Its variable manufacturing overhead is applied to production based on direct labor-hours and its standard cost card per unit is as follows: Direct materials: 5 pounds at $8 per pound Direct labor: 3 hours at $15 per hour Variable overhead: 3 hours at $9 per hour Total standard cost per unit $ 40 45 27 $ 112 The planning budget for March was based on producing and selling 21,000 units. However, during March the company actually produced and sold 26,000 units and incurred the following costs: a. Purchased 160,000 pounds of raw materials at a cost of $6.50 per pound. All of this material was used in production. b. Direct laborers worked 70,000 hours at a rate of $16 per hour. c. Total variable manufacturing overhead for the month was $655,200. 4. What is the materials quantity variance for March? (Indicate the effect of each variance by selecting "F" for…
! Required information [The following information applies to the questions displayed below.] Preble Company manufactures one product. Its variable manufacturing overhead is applied to production based on direct labor-hours and its standard cost card per unit is as follows: Direct materials: 5 pounds at $8 per pound Direct labor: 3 hours at $15 per hour Variable overhead: 3 hours at $9 per hour Total standard cost per unit $ 40 45 27 $112 The planning budget for March was based on producing and selling 21,000 units. However, during March the company actually produced and sold 26,000 units and incurred the following costs: a. Purchased 160,000 pounds of raw materials at a cost of $6.50 per pound. All of this material was used in production. b. Direct laborers worked 70,000 hours at a rate of $16 per hour. c. Total variable manufacturing overhead for the month was $655,200. 9. What is the labor rate variance for March? (Indicate the effect of each variance by selecting "F" for favorable,…