caused them, graphically. Begin your solutions with the skeletons of the visual aids. For each case below, compute the total variances and analyzed into factors that 1. Standard cost for materials per finished product is 8 pounds at P0.20 per pound. Purchases of materials- 1" 40,000 pounds at P0.18 and the 2 60,000 pounds at PO.21. Production is 9,400 finished units. Requisitions amounted to 77,800 pounds. Use FIFO. 2 Standard material cost Materials quantity variance, favorable The standard quantity exceeds the actual by 3,000 units. Actual price exceeds the standard by P1. 3. Actual material cost Material price variance, favorable The actual materials quantity is 90% of the allowed quantity. Actual material price is P7.50 per unit P28,500 1,500 P40,500 2,700 Graphical Approach To facilitate the material and labor variance analysis, we will use the graphical approach (using quadrant 1). To make the visual aids, the following factors will be computed first: 1. Actual materials price (P422,400/4,400 yards) 2. Standard materials price 3. Actual quantity used up 4. Standard quantity for one pair is 1-1/2 yards, so. for 2,800 pairs actually completed (2,800 x 1-1/2) is P96.00 per yard 100.00 per yard 4,400 yards 4,200 yards P100 S Area 1 P96 A Area2 4.200 S 4,400 yards A Area 1: Materials price variance (P4 x 4,200 yards) Area 2: Materials quantity variance (P96 x 200 yards) Total variance To countercheck: Total actual material cost (P96 x 4,400 yards) Less: Total standard material cost (P100 x 4,200 yards) Overall variance P16,800 F 19,200 U P2,400 U P422,400 420,000 P2,400 U 1. Actual labor rate (P66,000 +P132,000)/3,200 hrs. 2. Standard labor rate 3. Actual hours used up 4. Standard time for one pair is 1.2 hours, so, for 2,800 pairs actually completed is (2,800 x 1.2) P61.875 per hr. P60.000 per hr. 3,200 hours 3,360 hours P61.875 A Area 1 P60.000 S Area 2 3200 3,360 hours A S Area 1: Labor rate variance (P1.875 x 3,200 hrs.) Area 2: Labor time variance (P60 x 160 hrs.) Total variance To countercheck: Total actual labor cost (P61.875 x 3,200 hrs.) Less: Total standard labor cost (P60 x 3,360 hrs.) Overall variance P6,000 U 9,600 F P3,600 F P198,000 201,600 P3,600 F