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ASSIGNMENT-IN-STANDARD-COSTING (1)

The document outlines an assignment in standard costing involving the production and sale of plastic water containers. It details transactions for December, including standard and actual costs for direct materials and labor, and requires the computation of various variances. Additionally, it describes the use of a standard-cost system and flexible budget for a department, with specific calculations for material and labor variances based on actual production data.

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Erika Diang
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12 views1 page

ASSIGNMENT-IN-STANDARD-COSTING (1)

The document outlines an assignment in standard costing involving the production and sale of plastic water containers. It details transactions for December, including standard and actual costs for direct materials and labor, and requires the computation of various variances. Additionally, it describes the use of a standard-cost system and flexible budget for a department, with specific calculations for material and labor variances based on actual production data.

Uploaded by

Erika Diang
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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ASSIGNMENT IN STANDARD COSTING

1. The following transactions took place at the company during the month of December:
a. Produced and sold P50,000 plastic water containers at a sales price of P10 each.
b. Standard variable cost per unit:
a. Direct Materials: 2 lbs at P1 P2.00
b. Direct Labor: 0.10 hours at P15 P1.50

c. Actual Production Costs


Direct Materials Purchased:
200,000 pounds at P1.2 P240,000
Direct Materials Used:
110,000 pounds at P1.20 P132,000
Direct Labor: 6,000 hours at P14 P84,000

Compute:

a. Direct Materials price variance


b. Direct Materials efficiency variance
c. Direct Labor price variance
d. Direct Labor efficiency variance

2. X Department uses a standard-cost system and a flexible budget.


Denominator activity is:
Machine hours 140
Finished pieces produced 2,800

The standard costs in connection with this production are:


Direct materials at P1.20 P3,360
Direct labor at P0.1125 P315

Actual production for a month:


Machine hours 130
Finished pieces produced 2,860

Actual costs:
Direct materials P3,575
Direct labor P286

Direct labor hours and machine hours are proportional.

Required:

a. Total Material Variance.


b. Compute Direct Labor Rate Variance.
c. Compute Direct Labor Efficiency Variance.

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