Assignment in Standard Costing

Note: For all the problems provided please indicate if favorable or unfavorable.
Problem 1. Samson Company uses a standard costing system in the production of its only
product. The 84,000 units of raw materials inventory were purchased for P 126,000 and 4 units
of raw materials are required to produce one unit of final product. In October, the company
produced 14,400 units of product. The standard cost allowed for materials was P 72,000, and
there was an unfavorable usage variance of P 3,000.
Requirements
a. Samson Company's standard price for one unit of materials is?
b. The units of materials used to produce the October output totaled?
c. The materials price variance for the units used in October was?
Problem 2. A major activity at the Professional Regulation Commission is the processing of
application forms for the Board Examinations of the various professions under its control. To
analyze and control the costs incurred in the Applications Department, the PRC's accountant
previously prepared the following budgeted data for the year 200A:
Normal number of applications
processed per year 150,000
Budgeted variable costs of processing
the 150,000 applications P 10,500,00
Fixed costs per year 2,500,000
Number of hours per 100 applications
processed 200 hours
Wage rate per 100 applications P 6,000
During the year 200A, the department processed a total of 120,000 applications using 250,000
hours. The costs incurred were:
Total costs P 11,140,000
Labor costs 7,500,000
Requirements:
a. For 200A, the Application Department's total cost to process the 120,000 applications assuming
standard performance should be?
b. The total labor cost variance for 200A is?
c. The total direct labor cost variance may be broken down into?
Problem 3. Doc Corporation has a standard absorption and flexible budgeting system.
Information about the factory overhead costs for X Corporation’s February production activity
follows:
Standard variable overhead rate per direct labor hour P 24
Standard fixed overhead rate per direct labor hour 12
Total factory overhead application rate P 36
Standard direct labor hours allowed for
actual production 6,000 hours
Budgeted fixed factory overhead cost P 75,000
Actual total factory overhead cost incurred P 220,000
The actual fixed overhead cost incurred was in agreement with the budget. The company uses
the two-variance method for analyzing factory overhead cost variances.
Requirements
a. The net factory overhead variance is?
b. If the total overhead variance is broken down into variable and fixed variances, the amounts
are?
c. The controllable variance amounts to?
d. The volume variance amounts to?
e. The fixed overhead spending or budget variance is?
Problem 4. Flordarose Apparel, Inc. produces housedresses of one quality. The housedresses
are produced in batches to fill each special order from its customers, mostly stall owners in malls
located in various cities.
Flordarose sews the customers' labels on the housedresses. The standard costs for a dozen
housedresses are:
Material 24 meters @ P55 P 1,320
Labor 3 hours @ P245 735
Factory overhead 3 hours @ P200 600
Standard cost per dozen P 2,655
During December 200A, Flordarose worked on three orders, for which, the job cost sheets show
the following:
Units in Batch Materials Used Hours
Batch (dozens) (meter) Worked
A 100 2,410 298
B 170 4,044 513
C 120 2,882 289
Actual data pertaining to December production:

1. Actual quantity of materials purchased 9,500 meters
Purchase cost of materials P 532,000
Materials price variance is recognized when materials are purchased.

All inventories are carried at standard cost
2. Actual direct labor cost during December P 275,000
Actual labor time used in production 1,100 hours
3. Actual factory overhead costs incurred in
December P 228,000
Budgeted data - factory overhead:

1. Total budgeted factory overhead for Year 200A
based on the plant's normal capacity of
4,800 dozens of housedresses annually P 2,880,000
2. Forty percent (40%) of the total budgeted factory overhead is fixed
3. Flordarose applies factory overhead to production on the basis of direct labor hours.
Work in Process
1. There was no work in process at December 1.
2. As of December 31, only Batch C was still In process, which was 80% complete as to direct
labor.
Requirements:
a. The standard cost of production for the month of December 200A is
b. The materials purchase price variance for December was
c. The net materials quantity variance in meters is
d. The total labor efficiency variance in hours is
e. The total labor rate variance in pesos is
f. The controllable factory overhead variance for December was
g. The total non-controllable (volume) factory overhead variance for December was
Problem 5: S. Fortunato Soap, Inc. uses a standard cost system in its Powder Soap Division.
The standard cost of manufacturing one sack of Sabong Pulbos is as follows:
Materials 48 kilos @ P75 per kilo P 3,600

Labor 4 hours @ P40 per hour 160
Factory overhead P 50 per direct labor hour 200
Total standard cost per pack P 3,960
The budgeted fixed factory overhead is P 14,400 for a normal monthly production of 180 sacks of
Sabong Pulbos.
During the month, S. Fortunato Soap produced 160 sacks of Sabong Pulbos. The actual costs
were:
Material purchased and used – 7,700 kilos
At P73 per kilo P 562,100
Labor – 650 hours at P38 per hour 24,700
Factory overhead: Fixed factory overhead 14,400
Variable overhead 20,800
Total actual cost P 622,000
Requirements
a. The materials cost variances are:
b. The labor cost variances are:
c. The factory overhead cost variances are:
Problem 6: Calzada Company produces Four-Season Drinks by mixing juices of four fruits in
season. The standard costs and input for a 50-liter batch of the juice are as follows:
Standard Input Standard Cost Total
Fruits Quantity in Liters Per liter Standard Cost
Santol 20 P 10.00 P 200.00
Mango 10 21.25 212.50
Pineapple 25 7.50 187.50
Tamarind 5 15.00 75.00
60 P 675.00
The quantities purchased and used during the current month are shown below. A total of 14
batches were produced during the month. Quantity Purchased Purchase Quantity Used
Quantity in Purchased Purchase Quantity Used
Fruits (Liters) Price (Liters)
Santol 30 P 9.50 290
Mango 150 22.00 130
Pineapple 350 7.20 350
Tamarind 80 15.40 75
1,450 775
Requirements
a. How much is the total materials cost variance?
b. The materials purchase price variance is
c. The materials usage price variance is
d. The materials mix variance is
e. The materials yield variance is
f. The materials quantity variance is equal to

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Note: For all the problems provided please indicate if favorable or unfavorable.

Actual data pertaining to December production:

Materials price variance is recognized when materials are purchased.

Budgeted data - factory overhead:

Materials 48 kilos @ P75 per kilo P 3,600

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