Standard Costs and Operating Performance Measures 595 3. Pick out the two most significant variances that you computed in (1) above. Explain to Mr. Tan possible causes of these variances. Problem 2 The Helix Company, producer of a single product, made the following summary entries during July, 2018: Raw materials inventory ................... Material purchase price variance P50,000 Accounts payable ......... 250 P50,250 Work in process inventory .......... Materials quantity variance....... P30,000 Raw materials inventory ......... P 200 29,800 Work in process inventory P12,000 Direct labor efficiency ................. 400 Direct labor rate variance.. P 62 Wages payable .......... ........ 12,338 Work in process inventory Overhead applied. P 6,000 P 6,000 Overhead control................ P 6,100 Accumulated depreciation P 2,500 Accounts payable.... 2,000 Prepaid insurance. 100 Wages payable .... 1,500 Finished goods inventory ................. P48,000 Work in process inventory ........... P48,000 The standard cost card for the Helix Company's product is as follows: Raw materials (15 lbs. at P2 per 1b.). P30.00 Direct labor (3 hrs. at P4 per hour) .... 12.00 Overhead (3 hrs. at P2 per hour).. 6.00 P48.00 Required: 1. How many units were produced? 2. How many pounds of direct material were purchased? 3. What was the average price per pound paid for the direct material purchased? 4. How many pounds of direct materials were actually used?596 Chapter 14 5. How many direct labor hours were actually worked? 6. What was the average wage rate for the hours actually worked? Problem 3 The following raw material quantities and prices at standard are estimated to produce 2,000 pounds of a finished product: Material E 1,500 pounds at P0.300 P450.00 Material T 500 pounds at 0.200 100.00 Material C 400 pounds at 0.425 170.00 Total 2,400 P720.00 Actual quantities of raw materials used: (10,000 finished goods) Material E 8,000 pounds at P0.320 P2,560.00 Material T 2,400 pounds at 0.180 432.00 Material C 2,800 pounds at 0.450 1,260.00 Total 13,200 P4,252.00 Required: Compute the material mix and yield variances. (PhilCPA Adapted) Problem 4 (Comprehensive Variance Analysis; Journal Entries) Moda Mills, Inc., is a large producer of men's and women's clothing. The company uses standard costs for all of its products. The standard costs and actual costs for a recent period are given below for one of the company's product lines (per unit of product): Direct materials: Standard Cost Actual Cost Standard: 4.0 yards at P3.60 per yard. Actual: 4.4 yards at P3.35 per yard . P14.40 Direct labor: P14.74 Standard: 1.6 hours at P4.50 per hour........... Actual: 1.4 hours at P4.85 per h 7.20