Reference no: EM132745374
Question - Case - Mercurial Company has made the following information available for its production facility for the current month. Fixed overhead was estimated at 22,000 machine hours for the production cycle. Actual machine hours for the period were 22,500; 4,200 units were produced.
Material purchased (107,000 pieces) P529,650
Material quantity variance P7,000 U
Machine hours used (22,500 hours) VOH spending variance P100 U
Actual fixed overhead P81,000
Actual labor cost P60,300
Actual labor hours 8,500
Mercurial Company's standard costs are as follows:
Direct material 25 pieces @ P5 per piece
Direct labor 2.0 hours @ P7 per hour
Variable overhead (applied on a machine hour basis) 5.2 hours @ P3.00 per hour
Fixed overhead (applied on a machine hour basis) 5.2 hours @ P3.50 per hour
Required -
a. Determine the material purchase price variance.
b. Determine the standard quantity allowed for material.
c. Determine the total standard cost of material allowed.
d. Determine the actual quantity of material used.
e. Determine the labor rate variance.
f. Determine the standard hours allowed for labor.
g. Determine the total standard cost of labor allowed.
h. Determine the labor efficiency variance.
i. Determine the actual variable overhead incurred.
j. Determine the standard machine hours allowed.
k. Determine the variable overhead efficiency variance,
l. Determine the budgeted fixed overhead.
m. Determine the applied fixed overhead.
n. Determine the fixed overhead spending variance.
o. Determine the volume variance.
p. Determine the total overhead variance.
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