Reference no: EM132981838

Questions -

Q1) Light Manufacturing Company has set the following material standard components for the production of their products:

Material A

Requirement per unit - 2.50 lbs.

Standard cost - P30.75 per pound

During the period, the entity purchased 26,000 lbs. of Material A for P28.40 per pound. Actual production of 8,000 units called for 2.95 lbs. of Material A per unit.

From this information, the manager would then determine that material quantity variance is

A. P61,100 favorable

B. P61,100 unfavorable

C. P110,700 favorable

D. P110,700 unfavorable

Q2) Light Manufacturing Company's standard labor requirements provide that each unit of Product A is done at 3.50 hours. The standard rate per hour is P70. During the period, the entity completed 2,650 units of Product A. The following facts were proven in the analysis of operations:

The entity had an unfavorable material price variance due to an immediate decision to use a higher quality material used in the manufacturing of Product A.

There was also an unfavorable material quantity variance due to rework done in some units. The workers were not accustomed with the new material quality. This also led to an unfavorable labor efficiency variance of P185,500.

There was no labor rate variance.

From the information above, how much additional time spent compared to the standard hours per unit were dedicated by each worker?

A. 0.25 hours more

B. 0.50 hours more

C. 1 hour more

D. 2 hours more