Nose-to-Nose Company operates with a standard cost accounting system and uses cost variances as a means...

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Nose-to-Nose Company operates with a standard cost accounting system and uses cost variances as a means of detecting costs that may require more control. A standard cost sheet for a component that is manufactured exclusively in one plant is as follows: Direct Materials (6 units @ P4) Direct Labor (0.7 hour @ P8) Variable Overhead (0.75 direct labor hour @ P4) Fixed Overhead (0.75 direct labor hour @ P20) Standard Unit Cost Data from the past year were as follows: 1. Purchased 2,000,000 units of materials at a cost of P7,540,000 2. Manufactured 300,000 units of product and sold 250,000 units. 3. Budgeted P6,400,000 for fixed overhead for the year. 4. Used 1,812,000 units of materials in production. 5. Utilized 200,000 direct labor hours. 6. Spent P1,610,000 for direct labor. 7. Spent P880,000 for variable overhead. 8. Spent P6,321,000 for fixed overhead. 9. Actual machine hours used 280,000 P 24.00 5.60 3.00 15.00 P 47.60 Using standard costing system, determine the following variances: a. Material Price Variance b. Material Usage (Efficiency) Variance c. Labor Rate Variance d. Labor Efficiency Variance e. Variable Overhead Budget Variance (break this into spending and efficiency) f. Fixed Overhead Budget Variance g. Fixed Overhead Volume Variance Nose-to-Nose Company operates with a standard cost accounting system and uses cost variances as a means of detecting costs that may require more control. A standard cost sheet for a component that is manufactured exclusively in one plant is as follows: Direct Materials (6 units @ P4) Direct Labor (0.7 hour @ P8) Variable Overhead (0.75 direct labor hour @ P4) Fixed Overhead (0.75 direct labor hour @ P20) Standard Unit Cost Data from the past year were as follows: 1. Purchased 2,000,000 units of materials at a cost of P7,540,000 2. Manufactured 300,000 units of product and sold 250,000 units. 3. Budgeted P6,400,000 for fixed overhead for the year. 4. Used 1,812,000 units of materials in production. 5. Utilized 200,000 direct labor hours. 6. Spent P1,610,000 for direct labor. 7. Spent P880,000 for variable overhead. 8. Spent P6,321,000 for fixed overhead. 9. Actual machine hours used 280,000 P 24.00 5.60 3.00 15.00 P 47.60 Using standard costing system, determine the following variances: a. Material Price Variance b. Material Usage (Efficiency) Variance c. Labor Rate Variance d. Labor Efficiency Variance e. Variable Overhead Budget Variance (break this into spending and efficiency) f. Fixed Overhead Budget Variance g. Fixed Overhead Volume Variance

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To calculate the variances well use the following formulas a Material Price Variance Actual Quantity Purchased x Actual Price Actual Quantity Purchased x Standard Price b Material Usage Efficiency Var... View the full answer