lOMoARcPSD|4017738

lOMoARcPSD|4017738

Marley Company

The following July information is for Marley Company:

Standards:
Material 3.0 feet per unit @ P4.20 per foot
Labor 2.5 hours per unit @ P7.50 per
hour

Actual:
Production 2,750 units produced during the month
Material 8,700 feet used; 9,000 feet purchased @ P4.50 per
foot Labor 7,000 direct labor hours @ P7.90 per hour

(Round all answers to the nearest Peso.)

1. Refer to Marley Company. What is the material price variance (calculated at point of
purchase)? a. P2,700 U
b. P2,700 F
c. P2,610 F
d. P2,610 U

2. Refer to Marley Company. What is the material quantity

variance? a. P3,105 F
b. P1,050 F
c. P3,105 U
d. P1,890 U
3. Refer to Marley Company. What is the labor rate
variance? a. P3,480 U
b. P3,480 F
c. P2,800 U
d. P2,800 F

4. Refer to Marley Company. What is the labor efficiency

variance? a. P1,875 U
b. P938 U
c. P1,875 U
d. P1,125 U
 lOMoARcPSD|4017738

McCoy Company

McCoy Company has the following information available for October when 3,500 units were
produced (round answers to the nearest Peso).

Standards:
Material 3.5 pounds per unit @ P4.50 per pound
Labor 5.0 hours per unit @ P10.25 per hour

Actual:
Material purchased 12,300 pounds @ P4.25
Material used 11,750 pounds
17,300 direct labor hours @ P10.20 per hour

5. Refer to McCoy Company. What is the labor rate

variance? a. P875 F
b. P865 F
c. P865 U
d. P875 U

6. Refer to McCoy Company. What is the labor efficiency

variance? a. P2,050 F
b. P2,050 U
c. P2,040 U
d. P2,040 F

7. Refer to McCoy Company. What is the material price variance (based on quantity
purchased)? a. P3,075 U
b. P2,938 U
c. P2,938 F
d. P3,075 F

8. Refer to McCoy Company. What is the material quantity

variance? a. P2,250 F
b. P2,250 U
c. P225 F
d. P2,475 U

9. Refer to McCoy Company. Assume that the company computes the material price variance on
the basis of material issued to production. What is the total material variance?
a. P2,850 U
b. P5,188 U
c. P5,188 F
d. P2,850 F
 Scott Manufacturing

The following March information is available for Scott Manufacturing Company when it produced
2,100 units:

Standard:
Material 2 pounds per unit @ P5.80 per pound
Labor 3 direct labor hours per unit @ P10.00 per hour

Actual:
Material 4,250 pounds purchased and used @ P5.65 per
pound Labor 6,300 direct labor hours at P9.75 per hour

10. Refer to Scott Manufacturing. What is the material price

variance? a. P637.50 U
b. P637.50 F
c. P630.00 U
d. P630.00 F

11. Refer to Scott Manufacturing. What is the material quantity

variance? a. P275 F
b. P290 F
c. P290 U
d. P275 U

12. Refer to Scott Manufacturing. What is the labor rate

variance? a. P1,575 U
b. P1,575 F
c. P1,594 U
d. P0

13. Refer to Scott Manufacturing. What is the labor efficiency

variance? a. P731.25 F
b. P731.25 U
c. P750.00 F
d. none of the answers are correct
 Forrest Company

Forrest Company uses a standard cost system for its production process and applies overhead based on
direct labor hours. The following information is available for August when Forrest made 4,500 units:

Standard:
DLH per unit 2.50
Variable overhead per DLH P1.75
Fixed overhead per DLH P3.10
Budgeted variable overhead P21,875
Budgeted fixed overhead P38,750

Actual:
Direct labor hours 10,000
Variable overhead P26,250
Fixed overhead P38,000

14. Refer to Forrest Company. Using the one-variance approach, what is the total overhead
variance? a. P6,062.50 U
b. P3,625.00 U
c. P9,687.50 U
d. P6,562.50 U
15. Refer to Forrest Company. Using the two-variance approach, what is the controllable
variance? a. P5,812.50 U
b. P5,812.50 F
c. P4,375.00 U
d. P4,375.00 F

16. Refer to Forrest Company. Using the two-variance approach, what is the uncontrollably variance?
a. P3,125.00 F
b. P3,875.00 U
c. P3,875.00 F
d. P6,062.50 U

17. Refer to Forrest Company. Using the three-variance approach, what is the spending
variance? a. P4,375 U
b. P3,625 F
c. P8,000 U
d. P15,750 U

18. Refer to Forrest Company. Using the three-variance approach, what is the efficiency variance?

a. P9,937.50 F
b. P2,187.50 F
c. P2,187.50 U
d. P2,937.50 F
 lOMoARcPSD|4017738

19. Refer to Forrest Company. Using the three-variance approach, what is the volume
variance? a. P3,125.00 F
b. P3,875.00 F
c. P3,875.00 U
d. P6,062.50 U

20. Refer to Forrest Company. Using the four-variance approach, what is the variable overhead
spending variance?
a. P4,375.00 U
b. P4,375.00 F
c. P8,750.00 U
d. P6,562.50 U

21. Refer to Forrest Company. Using the four-variance approach, what is the variable overhead
efficiency variance?
a. P2,187.50 U
b. P9,937.50 F
c. P2,187.50 F
d. P2,937.50 F

22. Refer to Forrest Company. Using the four-variance approach, what is the fixed overhead
spending variance?
a. P7,000 U
b. P3,125 F
c. P750 U
d. P750 F

23. Refer to Forrest Company. Using the four-variance approach, what is the volume
variance? a. P3,125 F
b. P3,875 F
c. P6,063 U
d. P3,875 U
 Rainbow Company

Rainbow Company uses a standard cost system for its production process. Rainbow Company applies
overhead based on direct labor hours. The following information is available for July:

Standard:
Direct labor hours per unit 2.20
Variable overhead per hour P2.50
Fixed overhead per hour
(based on 11,990 DLHs) P3.00

Actual:
Units produced 4,400
Direct labor hours 8,800
Variable overhead P29,950
Fixed overhead P42,300

24. Refer to Rainbow Company Using the four-variance approach, what is the variable overhead
spending variance?
a. P7,950 U
b. P25 F
c. P7,975 U
d. P10,590 U

25. Refer to Rainbow Company Using the four-variance approach, what is the variable
overhead efficiency variance?
a. P9,570 F
b. P9,570 U
c. P2,200 F
d. P2,200 U

26. Refer to Rainbow Company Using the four-variance approach, what is the fixed overhead
spending variance?
a. P15,900 U
b. P6,330 U
c. P6,930 U
d. P935 F

27. Refer to Rainbow Company Using the four-variance approach, what is the volume
variance? a. P6,930 U
b. P13,260 U
C. P0
d. P2,640 F

28. Refer to Rainbow Company Using the three-variance approach, what is the spending
variance? a. P23,850 U
b. P23,850 F
c. P14,280 F
d. P14,280 U
29. Refer to Rainbow Company Using the three-variance approach, what is the efficiency
variance? a. P11,770 F
b. P2,200 F
c. P7,975 U
d. P5,775 U
30. Refer to Rainbow Company Using the three-variance approach, what is the volume
variance? a. P13,260 U
b. P2,640 F
c. P6,930 U
D. P0

31. Refer to Rainbow Company Using the two-variance approach, what is the controllable
variance? a. P21,650 U
b. P16,480 U
c. P5,775 U
d. P12,080 U

32. Refer to Rainbow Company Using the two-variance approach, what is the noncontrollable
variance? a. P26,040 F
b. P0
c. P6,930 U
d. P13,260 U

33. Refer to Rainbow Company Using the one-variance approach, what is the total
variance? a. P19,010 U
b. P6,305 U
c. P12,705 U
d. P4,730 U

34. Actual fixed overhead is P33,300 (12,000 machine hours) and fixed overhead was estimated at
P34,000 when the predetermined rate of P3.00 per machine hour was set. If 11,500 standard hours
were allowed for actual production, applied fixed overhead is
a. P33,300.
b. P34,000.
c. P34,500.
d. not determinable without knowing the actual number of units produced.

35. One unit requires 2 direct labor hours to produce. Standard variable overhead per unit is P1.25 and
standard fixed overhead per unit is P1.75. If 330 units were produced this month, what total amount
of overhead is applied to the units produced?
a. P990
b. P1,980
c. P660
d. cannot be determined without knowing the actual hours worked

36. Western Company uses a standard cost accounting system. The following overhead costs
and production data are available for August:

Standard fixed OH rate per DLH P1

Standard variable OH rate per DLH P4
Budgeted monthly DLHs 40,000
Actual DLHs worked 39,500
Standard DLHs allowed for actual production 39,000
Overall OH variance-favorable P2,000

The total applied manufacturing overhead for August should

be a. P195,000.
b. P197,000.
c. P197,500.
d. P199,500.
37. Paramount Company uses a standard cost system and prepared the following budget at
normal capacity for January:

Direct labor hours 24,000

Variable OH P48,000
Fixed OH P108,000
Total OH per DLH P6.50

Actual data for January were as follows:

Direct labor hours worked 22,000
Total OH P147,000
Standard DLHs allowed for capacity attained 21,000

Using the two-way analysis of overhead variances, what is the controllable variance for
January? a. P3,000 F
b. P5,000 F
c. P9,000 F
d. P10,500 U

38. The following information is available from the Fitzgerald Company:

Actual OH P15,000
Fixed OH expenses, actual P7,200
Fixed OH expenses, budgeted P7,000
Actual hours 3,500
Standard hours 3,800
Variable OH rate per DLH P2.50

Assuming that Fitzgerald uses a three-way analysis of overhead variances, what is the overhead
spending variance?
a. P750 F
b. P750 U
c. P950 F
d. P1,500 U

39. Hagman Company uses a two-way analysis of overhead variances. Selected data for the
April production activity are as follows:

Actual variable OH incurred P196,000

Variable OH rate per MH P6
Standard MHs allowed 33,000
Actual MHs 32,000

Assuming that budgeted fixed overhead costs are equal to actual fixed costs, the controllable variance
for April is
a. P2,000 F.
b. P4,000 U.
c. P4,000 F.
d. P6,000 F.
 40. Oxygen Company uses a standard cost system. Overhead cost information for October is as

follows: Total actual overhead incurred P12,600

Fixed overhead budgeted P3,300
Total standard overhead rate per MH P4
Variable overhead rate per MH P3
Standard MHs allowed for actual production 3,500

What is the total overhead

variance? a. P1,200 F
b. P1,200 U
c. P1,400 F
d. P1,400 U
Uniform Company
Uniform Company has developed standard overhead costs based on a capacity of 180,000 machine hours as
follows:

Standard costs per unit:

Variable portion 2 hours @ P3 = P 6
Fixed portion 2 hours @ P5 = 10
P16

During April, 85,000 units were scheduled for production, but only 80,000 units were actually
produced. The following data relate to April:

Actual machine hours used were 165,000.

Actual overhead incurred totaled P1,378,000 (P518,000 variable plus P860,000 fixed).
All inventories are carried at standard cost.

41. Refer to Uniform Company. The variable overhead spending variance for April
was a. P15,000 U.
b. P23,000 U.
c. P38,000 F.
d. P38,000 U.

42. Refer to Uniform Company. The variable overhead efficiency variance for April
was a. P15,000 U.
b. P23,000 U.
c. P38,000 F.
d. P38,000 U.

43. Refer to Uniform Company. The fixed overhead spending variance for April
was a. P40,000 U.
b. P40,000 F.
c. P60,000 F.
d. P60,000 U.

44. Refer to Uniform Company. The fixed overhead volume variance for April
was a. P60,000 U.
b. P60,000 F.
c. P100,000 F.
d. P100,000 U.
 Ultra Shine Company

Ultra Shine Company manufactures a cleaning solvent. The company employs both skilled and
unskilled workers. To produce one 55-gallon drum of solvent requires Materials A and B as well as
skilled labor and unskilled labor. The standard and actual material and labor information is presented
below:

Standard:
Material A: 30.25 gallons @ P1.25 per gallon
Material B: 24.75 gallons @ P2.00 per gallon

Skilled Labor: 4 hours @ P12 per hour

Unskilled Labor: 2 hours @ P 7 per hour

Actual:
Material A: 10,716 gallons purchased and used @ P1.50 per gallon
Material B: 17,484 gallons purchased and used @ P1.90 per gallon

Skilled labor hours: 1,950 @ P11.90 per hour

Unskilled labor hours: 1,300 @ P7.15 per hour
During the current month Ultra Shine Company manufactured 500 55-gallon drums.

Round all answers to the nearest whole Peso.

45. Refer to Ultra Shine Company. What is the total material price
variance? a. P877 F
b. P877 U
c. P931 U
d. P931 F
46. Refer to Ultra Shine Company. What is the total material mix
variance? a. P3,596 F
b. P3,596 U
c. P4,864 F
d. P4,864 U
47. Refer to Ultra Shine Company. What is the total material yield
variance? a. P1,111 U
b. P1,111 F
c. P2,670 U
d. P2,670 F
48. Refer to Ultra Shine Company. What is the labor rate variance?
a. P0
b. P1,083 U
c. P2,583 U
d. P1,083 F
49. Refer to Ultra Shine Company. What is the labor mix
variance? a. P1,083 U
b. P2,588 U
c. P1,083 F
d. P2,588 F
50. Refer to Ultra Shine Company. What is the labor yield
variance? a. P2,583 U
b. P2,583 F
c. P1,138 F
d. P1,138 U