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Assignment 8
1. During August 2014, a company produced 1,000 units of a product using 3,600 pounds of
direct material at a cost of P2.20 per pound. The direct material standard requires 4 pounds of
material per unit of product at a standard price of P2.00 per pound. The material efficiency
(volume/quantity) variance is:
a. P 880 favorable
c. P 800 favorable
b. P 880 unfavorable
d. P 800 unfavorable
2.
Staff Company uses a standard cost system Information for raw materials for Product RB for
the month of October are as follows:
Standard unit price
Actual purchase price per unit
Actual quantity purchased
Actual quantity used
Standard quantity allowed for actual
production
P1.60
P1.55
2,000 units
1,900 units
1,800 units
20,000
P40,000
P2.10
P3,000
A recent months transaction were: 160,000 pounds of wood were purchased at P6.50 per
pound; 50,000 pounds of trim were purchased at P9.60 per pound. 155,000 pounds of wood
were issued to production; 48,500 pounds of trim were issued to production. Direct labor
incurred was 31,000 hours at an average cost of P11.50 per hour. Overhead costs were
P302,000, of which P181,000 were variable. Six thousand units were produced during the
month.
4. What was the total actual cost of wood purchased?
a. P 1,007,500
c. P 1,040,000
b. P 1,024,000
d. P 480,000
5. What was the total standard cost of wood purchased?
a. P 500,000
c. P 1,024,000
b. P 992,000
d. P 1,040,000
6. What was the wood price variance?
a. P 48,000 favorable
b. P 16,000 unfavorable
c. P 48,000 unfavorable
d. P 16,000 favorable
c. P 5,000 unfavorable
d. P 20,000 favorable
c. P 5,000 unfavorable
d. P 15,000 favorable
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