MILKTI uses standard cost system for its production of milk tea. Milk tea is produced by...

  

 

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MILKTI uses standard cost system for its production of milk tea. Milk tea is produced by mixing up the following major ingredients; milk, tea and sugar syrup. Ail ingredients are inventoried per liter (for ease of accounting). Milk tea are sold per cup, and to produce one cup of milk tea needs 500ml. Materials standards and costs for the production of one output are: Ingredients Liters Cost per liter (Php) Amount Milk 0.40 60.00 24.00 Tea 0.05 100.00 5.00 Sugar syrup 0.05 50.00 2.50 Total Input 0.500 31.50 Output 0.500 The monthly factory overhead budget for a normal capacity level of 2,500 direct labor hours is as follows: Variable Overhead P 21.500 Fixed Overhead 40,000 Total P 61.500 To convert 0.50 of ingredients into 0.50 of output requires 0.20 direct labor hours at P62.50 per direct labor hour. Factory overhead is applied on a direct labor hour basis. Actual data for the month of September follows: The company has been able to produce 30,000 cups of milk tea, with cost as follows: Direct Labor 2,450 hours at P150,000 Variable Overhead 23,000 Fixed Overhead 40,000 Materials Purchased Quantity (liters) Cost / Kg Milk 15,000 P 65.00 Tea 1,600 P105.00 Sugar 1.700 P 48,00 No inventories of work in process at the beginning of the month existed. No beginning inventory of materials as well because the company practices Just in Time (JIT) principle. The amount purchased is the amount to be used in making milk tea. Format in answering: number space letter (capital letter), maximum 2 decimal places, see example: -3.000.25 F or 1521.50 U Required: Material Mix Variance Labor Rate Variance Labor Efficiency Variance FOH Spending Variance FOH Efficiency Variance MILKTI uses standard cost system for its production of milk tea. Milk tea is produced by mixing up the following major ingredients; milk, tea and sugar syrup. Ail ingredients are inventoried per liter (for ease of accounting). Milk tea are sold per cup, and to produce one cup of milk tea needs 500ml. Materials standards and costs for the production of one output are: Ingredients Liters Cost per liter (Php) Amount Milk 0.40 60.00 24.00 Tea 0.05 100.00 5.00 Sugar syrup 0.05 50.00 2.50 Total Input 0.500 31.50 Output 0.500 The monthly factory overhead budget for a normal capacity level of 2,500 direct labor hours is as follows: Variable Overhead P 21.500 Fixed Overhead 40,000 Total P 61.500 To convert 0.50 of ingredients into 0.50 of output requires 0.20 direct labor hours at P62.50 per direct labor hour. Factory overhead is applied on a direct labor hour basis. Actual data for the month of September follows: The company has been able to produce 30,000 cups of milk tea, with cost as follows: Direct Labor 2,450 hours at P150,000 Variable Overhead 23,000 Fixed Overhead 40,000 Materials Purchased Quantity (liters) Cost / Kg Milk 15,000 P 65.00 Tea 1,600 P105.00 Sugar 1.700 P 48,00 No inventories of work in process at the beginning of the month existed. No beginning inventory of materials as well because the company practices Just in Time (JIT) principle. The amount purchased is the amount to be used in making milk tea. Format in answering: number space letter (capital letter), maximum 2 decimal places, see example: -3.000.25 F or 1521.50 U Required: Material Mix Variance Labor Rate Variance Labor Efficiency Variance FOH Spending Variance FOH Efficiency Variance

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Material Mix Variance 7900 F Material Mix Variance Inputs Difference A Milk Tea Sugar Syrup To... View the full answer