Reference no: EM133088021

Question - Them Contractors, Inc. paints interiors of residences and commercial structures. The firm's management has established cost standards per 100 square feet of area to be painted.

Direct material (P18 per gallon of paint) P1.50

Direct labor 2.00

Variable overhead 0.60

Fixed overhead (based on 600,000 square feet per month) 1.25

Management has determined that 400 square feet can be painted by the average worker each hour. During May, the company painted 600,000 square feet of space and incurred the following costs:

Direct material (450 gallons purchased and used) P 8,300.00

Direct labor (1,475 hours) 12,242.50

Variable overhead 3,480.00

Fixed overhead 7,720.00

Based on the information above, answer the following:

1. Prepare the journal entry related to the material quantity variance.

2. Prepare the journal entry related to the direct labor variances.

3. Compute the variable overhead spending variance using a four-variance approach.

4. Compute the variable overhead spending variance using a three-variance approach.