Reference no: EM132561768

Question 1: ALASKADO Co.'s operations for the month just ended originally set up a 60,000 direct labor hour level, with budgeted direct labor of P960,000 and budgeted variable overhead of P240,000. The actual results revealed that direct labor incurred amounted to P1,148,000 and that the unfavorable overhead variance was P40,000. Labor trouble caused an unfavorable labor efficiency variance of P120,000, and new employees hired at higher rates resulted in an actual average wage rate which was higher by P0.40 than the standard average wage rate per hour. The total number of standard direct labor hours allowed for the actual units produced is:

a. P52,500

b. P60,000

c. P62,500

d. P70,000

Question 2: Operational statistics generated for the period just ended for API Co., maker of a line of furniture, follow:

Standards per set:

Materials - 2.0 yards @ P100

Labor - .5 hour @ P200

Actual results:

Production - 20,000 sets

Materials used - 37,000 yards

Price per yard - P102.00

Direct labor hours used - 9,000 hours

Direct labor cost - P1,764,000

The direct labor rate variance was:

a. P36,000 favorable

b. P36,000 unfavorable

c. P40,000 favorable

d. P40,000 unfavorable

Question 3: The flexible-budget variance in operating income is

a. Actual operating income minus flexible budget operating income.

b. Budgeted unit price times the difference between actual inputs and budgeted inputs for the actual activity level achieved.

c. A flexible budget amount minus a static budget amount.

d. Actual unit price minus budgeted unit price, times the actual units produced.