Mercurial Company has made the following information available for its production facility for the current month. Fixed
Question:
Mercurial Company has made the following information available for its production facility for the current month. Fixed overhead was estimated at 22,000 machine hours for the production cycle. Actual machine hours for the period were 22,500; 4,200 units were produced.
Material purchased (107,000 pieces) | P529,650 | |
Material quantity variance | P7,000 | U |
Machine hours used (22,500 hours) | ||
VOH spending variance | P100 | U |
Actual fixed overhead | P81,000 | |
Actual labor cost | P60,300 | |
Actual labor hours | 8,500 |
Mercurial Company’s standard costs are as follows:
Direct material | 25 pieces @ P5 per piece |
Direct labor | 2.0 hours @ P7 per hour |
Variable overhead | |
(applied on a machine hour basis) | 5.2 hours @ P3.00 per hour |
Fixed overhead | |
(applied on a machine hour basis) | 5.2 hours @ P3.50 per hour |
Determine the following items:
a. | material purchase price variance |
b. | standard quantity allowed for material |
c. | total standard cost of material allowed |
d. | actual quantity of material used |
e. | labor rate variance |
f. | standard hours allowed for labor |
g. | total standard cost of labor allowed |
h. | labor efficiency variance |
i. | actual variable overhead incurred |
j. | standard machine hours allowed |
k. | variable overhead efficiency variance |
l. | budgeted fixed overhead |
m. | applied fixed overhead |
n. | fixed overhead spending variance |
o. | volume variance |
p. | total overhead variance |