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    STANDARD COSTING With GP VARIANCE ANALYSIS KEY ANSWERS

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    aziel caith florentin
    1. The document outlines standard costing and variance analysis for materials and labor. It provides budgeted and actual production quantities, costs, and variances for materials and labor. 2. Variance analysis is also presented for total materials cost, quantity, price, and purchase price variances. Labor cost, efficiency, and rate variances are also calculated. 3. Materials mix, price, and yield variances are analyzed based on different material inputs and sales mix. Factory overhead variances including volume and controllable variances are also calculated.

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    STANDARD COSTING With GP VARIANCE ANALYSIS KEY ANSWERS

    Uploaded by

    aziel caith florentin
    70 views19 pages
    1. The document outlines standard costing and variance analysis for materials and labor. It provides budgeted and actual production quantities, costs, and variances for materials and labor. 2. Variance analysis is also presented for total materials cost, quantity, price, and purchase price variances. Labor cost, efficiency, and rate variances are also calculated. 3. Materials mix, price, and yield variances are analyzed based on different material inputs and sales mix. Factory overhead variances including volume and controllable variances are also calculated.

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    STANDARD-COSTING-with-GP-VARIANCE-ANALYSIS-KEY-ANSWERS.xlsx

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    1. The document outlines standard costing and variance analysis for materials and labor. It provides budgeted and actual production quantities, costs, and variances for materials and labor. 2. Variance analysis is also presented for total materials cost, quantity, price, and purchase price variances. Labor cost, efficiency, and rate variances are also calculated. 3. Materials mix, price, and yield variances are analyzed based on different material inputs and sales mix. Factory overhead variances including volume and controllable variances are also calculated.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Download as xlsx, pdf, or txt
    70 views19 pages

    STANDARD COSTING With GP VARIANCE ANALYSIS KEY ANSWERS

    Uploaded by

    aziel caith florentin
    1. The document outlines standard costing and variance analysis for materials and labor. It provides budgeted and actual production quantities, costs, and variances for materials and labor. 2. Variance analysis is also presented for total materials cost, quantity, price, and purchase price variances. Labor cost, efficiency, and rate variances are also calculated. 3. Materials mix, price, and yield variances are analyzed based on different material inputs and sales mix. Factory overhead variances including volume and controllable variances are also calculated.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Download as xlsx, pdf, or txt
    of 19

    STANDARD COSTING WITH GP VARIANCE ANALYSIS

    I. Materials & Labor Variance Analysis


    1. Budgeted Production - 100 units (normal capacity)
    A. Budgeted Quantity
    Direct Materials (100 units @ 3 metallic bars) 300 bars

    B. Budgeted Materials Cost


    300 bars @ Php 5.00 per bar 1,500.00

    3. Actual Production of 120 units


    A. Standard Quantity
    120 units x 3 metallic bars 360 bars

    B. Standard Material Cost


    360 bars @ Php 5.00 per bar 1,800.00

    C. Standard Hours
    120 units x 2 labor hours 240 hours

    D. Standard Labor Cost


    240 hours @ Php 10.00 per hour 2,400.00

    4A. Materials Budget Variance (Actual Cost less Budgeted Cost)


    Actual Cost: 400 bars @ Php 6.00 per bar = 2,400
    Budgeted Cost: 300 bars @ Php 5.00 per bar = 1,500

    Materials Budget Variance = 900 unfavorable

    4B. Materials Standard Cost Variance (Actual Cost less Standard Cost)
    Actual Cost: 2,400
    Standard Cost: 1,800

    Materials Standard Cost Variance = 600 unfavorable


    4C. Materials Quantity Variance (Chage in Quantity x Standard Price)
    Actual Quantity: 400 bars
    Standard Quantity: 360 bars
    Standard Price: Php 5.00

    Materials Quantity Variance = 200 unfavorable

    4D. Materials Price Variance (Change in Price x Actual Quantity)


    Actual Price: Php 6.00
    Standard Price: Php 5.00
    Actual Quantity: 400 bars

    Materials Price Variance = 400 unfavorable

    5A. Total Materials Cost Variance (Actual Quantity x Actual Price) less (Standard Quantity x Standar
    Actual Purchase of 500 bars @ a total cost of Php 2,000
    Thus, actual price per unit is Php 4.00
    Actual Quantity used: 400 bars
    Standard Quantity: 380 bars
    Standard Price: Php 5.00 per bar

    Total Materials Cost Variance = 300 favorable (difference of Materials Quantity Variance and Mat

    5B. Materials Quantity Variance (Change in Quantity x Standard Price)


    Actual Quantity used: 400 bars
    Standard Quanty: 380 bars
    Standard Price: Php 5.00

    Materials Quantity Variance = 100 unfavorable

    5C. Materials Price Usage Variance (Change in Price x Actual Quantity used)
    Actual Price: Php 4.00
    Standard Price: Php 5.00
    Actual Quantity used: 400 bars
    Materials Price Usage Variance = 400 favorable

    5D. Materials Purchase Price Variance (Change in Price x Actual Quantity Purchased)
    Actual Price: Php 4.00
    Standard Prce: Php 5.00
    Actual Quantity Purchased: 500 units

    Materials Purchase Price Variance = 500 favorable

    6A. Total Labor Cost Variance (Actual Hours x Actual Rate) less (Standard Hours x Standard Rate)
    Actual = Payroll of Php 2,200 for 200 hours rendered; thus Php 11.00 per hour (Actual Rate)
    Actual hours = 200 hours
    Standard = 2 Direct Labor Hour @ Php 10.00 per hour (Standard Rate)
    Standard Quantity (# of finished units x Standard Hours) = 240 hours

    Total Labor Cost Variance = 200 favorable (difference of Labor Efficiency Variance and Labor Rate

    6B. Labor Efficiency Variance (LEV) = Change in Hours x Standard Rate


    Actual hours = 200 hours
    Standard hours = 240 hours
    Standard Rate = Php 10.00

    Labor Efficiency Variance = 400 favorable

    6C. Labor Rate Variance (LRV) = Change in Rate x Actual Hours


    Acutal Rate = Php 11.00
    Standard Rate = Php 10.00
    Actual hours = 200 hours

    Labor Rate Variance = 200 unfavorable


    II. Materials Price, Mix, and Yield Variances
    1. Total Materials Cost Variance (Actual Cost les

    Patis 500 grams


    Toyo 400 grams
    Suka 100 grams
    Total 1,000 grams

    Standard Quantity
    Patis 500 grams
    Toyo 400 grams
    Suka 100 grams
    Total 1,000 grams

    *Total Standard Cost (3,600 x 90 kg)


    **Actual Cost

    Total Materials Cost Variance = 14,000 favorab

    2. Materials Price Variance (Actual Quantity x C


    Patis (60,000 x (Php 2 - Php 3))
    Toyo (30,000 x (Php 5 - Php 4))
    Suka (10,000 x (Php 4 - Php 5))

    3. Materials Mix Variance or MMV (Change in Q


    *Note: Q (quantity) = inputs used in production
    SOLUTION NO. 1
    Patis (60,000 - 50,000) x Php 3.00
    Toyo (30,000 - 40,000) x Php 4.00
    Suka (10,000 - 10,000) x Php 5.00
    *resulting to a 10,000 favorable (30,000 unfavo

    Actual Mix:
    Patis 60,000
    Toyo 30,000
    Suka 10,000
    100,000

    SOLUTION NO. 2
    MMV = (Actual Quantity x Standard Price) less T
    *TAQASP = TAQ x WASP
    Actual Quantity
    Patis 60,000
    Toyo 30,000
    Suka 10,000
    Total
    Less: TAQASP (100,000 x Php 3.6)
    andard Quantity x Standard Price) Favorable

    4. Materials Yield Variance (Change in Quantity


    *Note: Q (quantity) = outputs produced becaus
    Change in Quantity of 10,000 (100,000 less 90,0
    90 kg x 1,000 grams = 90,000 kg
    WASP = Php 3.6
    Quantity Variance and Materials Price Usage Variance) Material Yield Variance = 36,000 unfavorable

    SOLUTION NO. 2
    Material Yield Variance = TAQASP less Standard
    TAQASP = 360,000
    Standard Cost = 324,000 (Php 3,600 x 90 kg)

    Material Yield Variance = 36,000 unfavorable

    III. Factory Overhead Variance


    Requirement No. 1
    A. 10,000 hours (2,500 units x 4DLH)
    B. 20,000
    C. 10,000 (10,000 hours x 1)
    D. 30,000
    E. 2 (Standard Fixed Manufacturing Overhead
    Purchased) F. 1 (Predetermined Overhead rates allowed)
    G. 3 (Total Application Rate)

    Requirement No. 2
    BAAH = 20,000 + 1(7,500)
    BAAH = 27,500

    Hours x Standard Rate) Requirement No. 3


    er hour (Actual Rate) BASH = 20,000 + 1(8,000)
    BASH = 28,000

    IV. 2-Way Factory Overhead Variance Analysis


    Requirement No. 1: Overall FOH Variance
    y Variance and Labor Rate Variance) FOH Budget Formula = 72,000 + 2x
    Budget hours = 12,000 hours

    Fixed Factory Overhead (FFOH) = 72,000


    Variable Factory Overhead (VFOH) = 96,000 (12
    Budgeted Factory Overhead = 168,000

    BASH = 72,000 + 2(10,000)


    BASH = 92,000

    SHSR = 10,000 x 8
    SHSR = 80,000

    AFOH = 75,000

    Overall FOH Variance = AFOH less SHSR


    Overall FOH Variance = 5,000 favorable (differe

    Requirement No. 2: FOH Controllable Variance


    FOH Controllable Variance = AFOH less BASH
    FOH Controllable Variance = 17,000 favorable
    Requirement No. 3: FOH Volume Variance
    FOH Volume Variance = BASH less SHSR
    FOH Volume Variance - 12,000 unfavorable
    x, and Yield Variances
    t Variance (Actual Cost less Standard Cost)
    Sales Mix Std. Unit Cost Weighted Average Std. Price (WASP)
    50% 3 1.5
    40% 4 1.6
    10% 5 0.5
    3.6

    Standard Unit Cost Std. Cost


    3 1,500
    4 1,600
    5 500
    3,600

    (3,600 x 90 kg) 324,000.00


    310,000.00

    Variance = 14,000 favorable

    iance (Actual Quantity x Change in Price)


    60,000 favorable
    - Php 4)) 30,000 unfavorable
    10,000 favorable

    ance or MMV (Change in Quantity x Standard Price)


    inputs used in production
    SOLUTION NO. 1
    ) x Php 3.00 30,000 unfavorable
    ) x Php 4.00 40,000 favorable
    ) x Php 5.00 0
    0 favorable (30,000 unfavorable less 40,000 favorable)

    Standard Quantity:
    50,000 (100,000 * 50%)
    40,000 (100,000 * 40%)
    10,000 (100,000 * 10%)
    100,000

    SOLUTION NO. 2
    tity x Standard Price) less TAQASP*

    Std. Unit Cost


    3 180,000.00
    4 120,000.00
    5 50,000.00
    350,000.00
    0 x Php 3.6) 360,000.00
    (10,000.00)

    ance (Change in Quantity x Weighted Average Standard Price)


    outputs produced because we're talking about "yield" variance
    10,000 (100,000 less 90,000)
    90,000 kg

    ce = 36,000 unfavorable

    SOLUTION NO. 2
    e = TAQASP less Standard Cost

    000 (Php 3,600 x 90 kg)

    ce = 36,000 unfavorable

    Variance

    0 units x 4DLH)
    Manufacturing Overhead Application Rate)
    Overhead rates allowed)

    erhead Variance Analysis (ConVol)


    verall FOH Variance
    = 72,000 + 2x

    ad (FFOH) = 72,000 FFOH per unit = Php 6


    rhead (VFOH) = 96,000 (12,000 x 8) VFOH per unit = Php 2
    erhead = 168,000 Standard Rate = Php 8
    Standard Hours = 10,000 hours

    = AFOH less SHSR


    = 5,000 favorable (difference of FOH Controllable Variance & FOH Volume Variance)

    OH Controllable Variance
    ance = AFOH less BASH
    iance = 17,000 favorable
    OH Volume Variance
    = BASH less SHSR
    e - 12,000 unfavorable
    V. 2-way, 3-way, and 4-way Factory Overhead Variance Analysis
    FOH Budget Formula : 20,000 + 1x

    Fixed Factory Overhead 20,000


    Variable Factory Overhead 10,000
    Budgeted Factory Overhead 30,000

    Fixed Rate (20,000/10,000 hours) 2


    Variable Rate 1
    Total Standard Rate (given) 3

    Budgeted hours (2,500 units normal capacity x 4hrs) = 10,000 hours


    Standard hours (2,000 units x 4hrs) = 8,000 hours
    Actual hours (2,000 units x 3.75hrs) = 7,500 hours (given)

    1. Budgeted Factory Overhead = 20,000 + 1(10,000)


    Budgeted Factory Overhead = 30,000

    2. Standard Factory Overhead = Standard Hours x Standard Rate


    Standard Factory Overhead = 8,000 hours x P 3 = 24,000

    3. BAAH = 20,000 + 1x
    BAAH = 20,000 + 1(7,500 hours) = 27,500

    4. BASH = 20,000 + 1x
    BASH = 20,000 + 1(8,000 hours) = 28,000

    5. Controllable Variance: AFOH less BASH


    Controllable Variance = 25,000 less 28,000
    Controllable Variance = 3,000 favorable

    6. Volume Variance: BASH less SHSR


    Volume Variance = 28,000 less 24,000
    Volume Variance = 4,000 unfavorable

    7. Spending Variance: AFOH less BAAH


    Spending Variance = 25,000 less 27,500
    Spending Variance = 2,500 favorable

    8. Efficiency Variance: BAAH less BASH


    Efficiency Variance = 27,500 less 28,000
    Efficiency Variance = 500 favorable

    9. Variable spending variance: AFOH (V) - BAAH (V)

    10. Fixed Spending Variance


    * 4-way
    Total Fixed Variable
    AFOH 25,000 15,000 10,000 AFOH (V) 10,000.00
    BAAH 27,500 20,000 7,500 BAAH (V) 7,500.00
    BASH 28,000 20,000 8,000 AFOH (F) 15,000.00
    SHSR 24,000 16000* 8000** BAAH (F) 20,000.00

    *8,000 x 2 Std FR
    **8,000 x 1 Std VR

    11. Budget (flexible) variance 2-way


    BFOH = 30,000
    SFOH = 24,000
    BASH = 28,000
    BAAH = 27,500
    AFOH = 25,000

    Formula: Budget Variance = Actual less Budgeted

    Budget Variance (2way) = CONTROLLABLE VARIANCE


    Actual Cost: AFOH = 25,000
    Budgeted Cost: BASH = 28,000
    Budget Variance (2way) = 3,000 favorable

    12. Budget (flexible) variance 3-way


    Budget Variance (3way) = SPENDING VARIANCE
    Actual Cost: AFOH = 25,000
    Budgted Cost: BAAH = 27,500
    Budget Variance (3way) = 2,500 favorable

    13. Variable controllable variance (AFOH less BASH)


    AFOH (V) = 10,000
    BASH (V) = 8,000
    Variable Controllable variance = 2,000 unfavorable

    14. Fixed Volume Variance (BASH less SHSR) or VOLUME VARIANCE


    NOTE: VOLUME VARIANCE and FIXED VOLUME VARIANCE are just THE SAME!

    BASH (F) = 20,000


    SHSR (F) = 16,000
    Fixed Volume Variance = 4,000 unfavorable

    15. Variable FOH Variance (AFOH less SHSR)


    AFOH (V) = 10,000
    SHSR (V) = 8,000
    Varibale FOH Variance = 2,000 unfavorable

    16. Fixed FOH Variance (AFOH less SHSR)


    AFOH (F) = 15,000
    SHSR (F) = 16,000
    Fixed FOH Variance = 1,000 favorable
    VI. GP Variance Analysis with Complete Information
    1. Overall GP Variance: Actual - Budgeted
    Actual Profit = 91,000
    Budgeted Profit = 144,000
    Overall GP Variance = 53,000 unfavorable

    2. Sales price Variance (PRICE FACTOR): Actual Quantity x Change in Price


    Actual Quantity = 13,000
    Actual Selling Price = 34.00
    Budgeted Selling Price = 36.00
    Sales Price Variance = 26,000 unfavorable

    3. Sales Volume Variance (VOLUME FACTOR): Change in Quantity x Budgeted Selli


    Actual Quantity = 13,000
    Budgeted Quantity = 12,000
    Budgeted Selling Price = 36.00
    Sales Volume Variance = 36,000 favorable

    4. Cost price variance (COST FACTOR): Actual Quantity x Change in Price


    Actual Quantity = 13,000
    Actual Selling Price = 27.00
    Budgeted Selling Price = 26.00
    Cost Price Variance = 39,000 unfavorable

    5. Cost Volume Variance (VOLUME FACTOR): Change in Quantity x Budgeted Sellin


    Actual Quantity = 13,000
    Budgeted Quantity = 12,000
    Budgeted Selling Price = 26.00
    Cost Volume Variance = 24,000 unfavorable

    VII. GP Variance Analysis with Incomplete Information


    1. Overall GP Variance
    Actual/Current Profit = 72,000
    Budgeted/Previous Profit = 80,000
    Overall GP Variance = 8,000 unfavorable
    2. Price Factor: Actual Quantity x Change in Price
    Price Factor = 12,000 favorable

    3. Cost Factor = 36,000 unfavorable

    4. Volume Factor = 16,000 favorable

    2,500.00 unfavorable (Variable Spending Variance)

    (5,000.00) favorable (Fixed Spending Variance)


    re just THE SAME!
    x Change in Price

    Quantity x Budgeted Selling Price

    Change in Price

    Quantity x Budgeted Selling Price

    Actual Sales 252,000


    AQ x BSP 240,000 SPV = 12,000 F 5% increase
    Budgeted Sales 200,000 SVV = 40,000 F 20% increase

    Actual Cost 180,000


    AQ x BCP 144,000 CPV = 36,000 U 25% decrease
    Budgeted Cost 120,000 CVV = 24,000 U 20% decrease

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