426 PROBLEMS Cost Accounting Problem 1 You have been given the following information of Michelle Corporation for June. Actual labor hours used Standard materials price Actual labor rate per hour 3,150 hours P 2.50 per unit P 3.00 Standard quantity of materials used 4,050 units Standard labor hours used Actual materials price Standard labor rate per hour 3,000 hours P 2.52 per unit P 3.10 Actual quantity of materials purchased and used 4,450 units Requirements: Compute the following 1. Material price variance 2. Materials efficiency variance 3. Labor rate variance 4. Labor efficiency variance Problem 2 Longview Hospital performs blood tests in its laboratory. The following standards have been set for each blood test performed. Item Direct materials Direct labor Variable overhead Std. Price or Quantity Std. Rate or Hours 2 plates 0.2 hours 0.2 hours P 2.75 per plate P 15.00 per hour P 7.00 per hour During May, the laboratory performed 1,500 blood tests. On May 1 there were no plates on hand; after a plate is used for a blood test it is discarded. Variable overhead is assigned to blood tests on the basis of direct labor hours. The following events occurred during May. A) 3,600 plates were purchased at a cost of P9,540 B) 3,200 plates were used for blood tests C) 340 actual direct labor hours were worked at a cost of P5,100 Requirements: Compute the following. 1. The material price variance 2. The material quantity variance 3. The labor rate variance 4. The labor efficiency variance 5. The variable overhead efficiency variance