Standard Costing (Material and Labor Variances) ABC Company manufactures a chemical used for industrial maintenance. This...

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Standard Costing (Material and Labor Variances) ABC Company manufactures a chemical used for industrial maintenance. This chemical, which is sold by the drum. generally has a stable selling price. The company produced and sold 60,000 drums in July, 2003. (1) Standard costs per drum of product manufactured were: Materials 10 gallons of raw material Direct labor 1 hour 25 Pesos 7 Pesos Fixed factory overhead per direct labor hour 4 Pesos Variable factory overhead per direct labor hour 6 Pesos Total factory overhead per direct labor hour 10 Pesos (2) Costs incurred during July were: Raw materials: 580,000 gallons used at a cost of P1,500,000 Direct labor. 65,000 hours worked at a cost of P470,000 Factory overhead: Depreciation of building and machinery (fixed) Supervision and indirect labor (semi-variable) Other factory overhead (variable) Total 230,000 Pesos 360,000 Pesos 76,500 Pesos 666,500 Pesos Scores Questions on 1: Compute the Price variance for direct material. Indicate whether the variances are favorable or unfavorable. Note: BOTH answers must be correct to get full credits. 2.5 On 2: Compute the Efficiency variance for direct material. Indicate whether the variances are favorable or unfavorable. Note: BOTH answers must be correct to get full credits. 2.5 on 3: Compute the Rate variance for direct Labor. Indicate whether the variances are favorable or unfavorable. Note: BOTH answers must be correct to get full credits. 2.5 n4 Compute the Efficiency variance for direct Labor. Indicate whether the variances are favorable or unfavorable. Note: BOTH answers must be correct to get full credits. 2.5 Scores Standard Costing (Material and Labor Variances) ABC Company manufactures a chemical used for industrial maintenance. This chemical, which is sold by the drum. generally has a stable selling price. The company produced and sold 60,000 drums in July, 2003. (1) Standard costs per drum of product manufactured were: Materials 10 gallons of raw material Direct labor 1 hour 25 Pesos 7 Pesos Fixed factory overhead per direct labor hour 4 Pesos Variable factory overhead per direct labor hour 6 Pesos Total factory overhead per direct labor hour 10 Pesos (2) Costs incurred during July were: Raw materials: 580,000 gallons used at a cost of P1,500,000 Direct labor. 65,000 hours worked at a cost of P470,000 Factory overhead: Depreciation of building and machinery (fixed) Supervision and indirect labor (semi-variable) Other factory overhead (variable) Total 230,000 Pesos 360,000 Pesos 76,500 Pesos 666,500 Pesos Scores Questions on 1: Compute the Price variance for direct material. Indicate whether the variances are favorable or unfavorable. Note: BOTH answers must be correct to get full credits. 2.5 On 2: Compute the Efficiency variance for direct material. Indicate whether the variances are favorable or unfavorable. Note: BOTH answers must be correct to get full credits. 2.5 on 3: Compute the Rate variance for direct Labor. Indicate whether the variances are favorable or unfavorable. Note: BOTH answers must be correct to get full credits. 2.5 n4 Compute the Efficiency variance for direct Labor. Indicate whether the variances are favorable or unfavorable. Note: BOTH answers must be correct to get full credits. 2.5 Scores