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1. T-Top Company produces single-colored T-shirts. The following standards for one T-shirt have been
established:
During the year, 20,700 yards of fabric were purchased and used in the production of 41,300 T-shirts.
The actual prime cost were:
REQUIRED: Compute the materials and labor variances associated with the production of T-shirts last
year, labelling each variance as favorable or unfavorable.
2. Likmuan, Inc., is a privately held furniture manufacturer. For August 2014, Likmuan had the following
standards for one of its products, a wheel chair:
The following data were compiled regarding actual performance: actual output units(chairs) produced,
2,000; square yards of input purchased and used, 3,700; price per square yards,P5.10; direct
manufacturing labor costs, P8,820; actual labor hours of input, 900; labor price per hour, P9.80.
REQUIRED:
1. Show computations of price and efficiency variances for direct materials and direct manufacturing
labor.
2. Suppose 6,000 square yards of materials were purchased ( at 5.10 per square yard), even though
only 3,700 square yards were used. Suppose further that variances are identified at their most
timely control point; accordingly, direct materials price variances are isolated and traced at the time
of purchase to the purchasing department rather than to the production department. Compute the
price and efficiency variance.
PROBLEM3
Mediamet Company produces one product and uses a standard costing system. The direct labor
standard indicates that three direct labor hours should be used for every unit produced. The normal
production volume is 120,000 units of this product. The budgeted overhead for the coming year follows:
During the year, Mediamet produced 120,600 units, worked 361,800 direct labor hours, and incurred
actual fixed overhead costs of P940,320 and actual variable overhead costs of P1,443,500.
REQUIRED:
1. Compute the applied variable overhead
2. Compute the variable overhead spending and efficiency variances.
3. Compute the applied fixed overhead
4. Compute the fixed overhead spending and volume variances
Problem 4
Malabon Company uses a standard cost system. The standard cost card for one of its product shows
the following materials standards:
B 5 0.40 2
C 25 0.20 5
50 kilos P21
The standard 50-kilo mix cost per kilo is 0.42(21/50 kilos). The standard mix should produce 40 kilos of
finished product, and the standard cost of finished product per kilo is P0.525(P21/40 kilos).
Problem 5
A company uses a standard costing system in the manufacture of its single product. The 35,000 units of
raw materials purchased and used cost P105,000, and two units of raw materials are required to
produce one unit of final product. In October, the company produced 12,000 units of product. The
flexible budget for materials was 60,000, and there was an unfavourable static budget variance of
35,000.
REQUIRED: