Reference no: EM132857375

Question - FOTO Company uses a standard cost system to help control costs and has established the following standards for one unit of its main product, The Wonder Camera Tripod:

Inputs Standards

Direct materials 3 metal bars per tripod at P 2.00 per bar

Direct labor ½ labor hour per tripod at P 10 per hour

At the start of the month, the budget includes a planned production of 100 units of tripod based on normal capacity; at the end of the month, actual production was 120 units of tripod, which resulted to using 400 bars of metal, purchased at cost of P 2.10 per bar.

REQUIRED -

1. Based on the BUDGETED production of 100 units:

A. How many metal bars must the company plan to use? (Budgeted quantity)

B. How much materials cost is included in the budget? (Budgeted cost)

2. Determine the actual cost of materials used. (Actual cost)

3. Based on ACTUAL production of 120 units:

A. How many metal bars should have been used? (Standard quantity)

B. How much materials cost should have been incurred? (Standard materials cost)

C. How many labor hours should have been spent? (Standard hours)

D. How much labor cost should have been incurred? (Standard labor cost)

4. Determine the following:

A. Materials budget variance

B. Materials standard cost variance

C. Materials quantity and price variance