1.Bless Inc. manufactures a single product in which variable manufacturing overhead is assigned on the basis of direct labor hours. The company uses a standard cost system and has established the following standards for one 

unit of product: Standard Qnty and Standard Price/Rate respectively are: Direct Materials - 1.5 pounds and P3.00/pound; Direct Labor - 0.6 hours and P6/hr; Variable FOH - 0.60 hours and P1.25/hr. During March, the following 

activity was recorded by the company: a. The company produced 3,000 units during the month; b. A total of 8,000 pounds of material were purchased at a cost of P23,000. c. There was no beginning inventory of materials on hand to start the month; at the end of the month, 2,000 pounds of material remained in the warehouse. d. During March, 1600 direct labor hours were worked at a rate of P6.50 per hour. e. Variable manufacturing overhead costs 

during March totaled P1,800. 

 

a. What is the material price variance for March?

b. the material quantity variance for March is?

c. the labor rate variance for March would be:

d. the labor efficiency variance for March should be?

e. the variable overhead spending variance for March is?

f. the variable overhead efficiency variance for March is?

2.HL Company employs standard absorption system for product costing. The standard cost of this product is as follows: Raw Materials - P14.50; Direct labor for 2 hours @ P8/hr is P16; Manufacturing overhead for 2hours @ P11/hr is P22. The total cost/unit (14.50+16+22) = P52.50. The manufacturing overhead rate is based upon normal annual activity level of 600,000 direct labor hours. The company planned to produce 25,000 units each month during 

2020. Budgeted factory overhead for 2020 is composed of P3,600,000 variable and P3,000,000 fixed. During April 2021, 26,000 units of product were produced using 53,500 direct labor hours at a cost of P433,350. Actual 

manufacturing overhead for the month was P260,000 fixed and P315,000 variable. The total manufacturing overhead applied during April was P572,000. 

 

a. The variable overhead spending variance must be:

b. the variable overhead efficiency variance must be:

c. the fixed overhead spending (budget) variance must be:

d. fixed overhead volume variance must be?

e. the total variance related to efficiency of production operations must be?

Answer rating: 100% (QA)

1 a Material price variance Materials purchased 8000 lbs Ending inventory of materials 2000 lbs Materials used 8000 2000 6000 lbs Total material cost ... View the full answer