1. .

Nyclyn
Salex
Protet
Total

Answer: D
(24 0.80 x P15)
(19.20 0.80 x P21)
(10 x P28)

P 450.00
504.00
280.00
P1,234.00

2. Answer: C
Required inputs to be placed in process per unit of product: 2.25 0.75
Standard Material cost per unit of product: 3.0 x P150
3.

Answer: B
Required inputs of raw materials (in pounds)
Standard price per pound
Standard materials cost per unit

.4 Answer: D
Net price per yard:
Purchase price
Freight
Purchase discount
Standard cost per yard
Standard quantity per scarf
Standard cost per scarf:

(60 0.80)
(2.5 x 0.98)

75.00
x 2.45
183.75

40.00
1.00
( 1.20)
39.80
0.50
19.90

0.03 x 40
0.475/0.95
0.50 x 39.80

.5 Answer: C
Total Minutes per worker
(8 hours x 60)
Rest Time
Productive minutes
Output per day per worker
(420 35) in 10-liter batch
Production hour good units
Rest minutes
(60 12)
Minutes used for rejects
(35 + 5) 5 good units
Total standard minutes per 10-good liter batch
.6 Answer: B
Weekly wages per worker
Fringe benefits (1,000 x 0.25)
Total weekly direct labor cost per worker
Labor cost per hour (1,250 40 hrs)
Labor cost per unit (31.25 x 2.50 hrs)

3.0 yards
P450

480
60
420
12
35 min
5 min
8 min
48 Min

1,000
250
1,250
31.25
P78.125

.7 Answer: D
Required number of quarts of berries (6 0.80)
Cost of berries (7.50 @ P8.00)
Cost of other ingredients (10 x 4.50)
Standard materials cost per batch
.8 Answer: C
Minutes required by sorting good berries 6 quarts @ 3 min.
Minutes required by mixing

7.50
60
45
105
18
12

Total number of minutes

Standard labor cost per batch (0.50 @ P50)

30
P25

.9 Answer: A
Unit cost of materials: (Debit to Goods in Process + Debit to Materials Quantity Variance - Credit to Materials
Price Variance)/Number of Units Completed
Total debits to work in process account
P51,690
Debit to materials quantity variance
1,970
Credit to materials price variance
( 3,740)
Actual materials cost
P49,920
Per unit cost: P49,920/96,000
P0.52
.10 Answer: A
Actual quantity used
Add favorable quantity (209/5.5)
Standard quantity allowed
.

11Answer: C
Actual materials price
Standard Quantity
Standard price
Actual Quantity used:
Price variance based on usage:

1,066
38
1,104
105,000/35,000
12,000 x 2
60,000/24,000
24,000 + (2,500/2.5)
25,000 x (3 2.50)

.12 Answer: D
Actual Quantity used
Favorable Quantity
3,735/1.5
Standard Quantity allowed
Production in units
17,400/15
.13 Answer: A
AQ @ SP (3,150 x 40)
SQ @ SP (600 x 5 x 40)
Unfavorable Quantity Variance

14,910
2,490
17,400
1,160

P126,000
120,000
P 6,000

.14 Answer: A
Actual quantity used (pounds)
23,500
Less: Excess pounds used (1,000 2)
500
Standard Quantity Allowed
23,000
Alternative Solution using the formula for Usage Variance:
MUV = (AQ SQ)SP
1,000 = (23,500 SQ)2
1,000 2 = 23,500 SQ
500 = 23,500 SQ
SQ = 23,000
.

15Answer: D
Actual Purchase Costs (AQ x SP)
= 84,000 (30,000 x 3) 6,000 Favorable

3.00
24,000
2.50
25,000
12,500

Standard Price = Usage Variance (AQ SQ)

3,000 (30,000 29,000) = P3
16. Answer: B
The actual purchase price per unit can be conveniently solved by using the purchase price variance - MPV =
AQ(AP-SP)
-240 = 1,600 (AP 3.60)
-240 1,600 = AP 3.60
0.15 = AP 3.60
AP = 3.45
.

17Answer: C
MPV = 1,400(1.10 1.00)
= 140

.18 Answer: A
MUV = (AQ SQ)SP
= (2,300 2,100) 6.25
= 1,250 Unfavorable
19. Answer: C
Actual materials cost
AQ @ SP (22,000 x 1.25)
Favorable Price Variance

26,400
27,500
( 1,100)

.20 Answer: A
Standard materials cost per batch (200 x 1) + (840 x 0.20) + (7 x 2) + (3 x 6) P400
Expected yield in batch (20,160 1,050)
19.20
Actual yield
18.50
Unfavorable yield in batch
0.70
Unfavorable yield variance (0.70 x 400)
P 280
21. Answer: D
Materials
Actual cost
Budgeted cost (8,500 @ 15)
Materials cost variance
Labor
AH @ SR (6,375 @ 12)
SH @ SR (8,500 @ 0.75 @ 12)
Labor Efficiency Variance
Actual Payroll
AH @ SR (6,375 @ 12)
Labor Rate Variance

127,500
127,500
0
76,500
76,500
0
77,775
76,500
1,275

.22 Answer: C
(AR - SR) x AH = rate variance
Therefore, the total variance (P654.50) when divided by the hourly difference (P4.27 - P4.10) will equal the
actual hours.

Actual hours (P654.50/P.17) = 3,850.

Proof: (P4.27 - P4.10) x 3,850 = P654.50
.

23Answer: A
Labor
M
F

AH
4,500
3,000
7,500

Std. Mix at AH
5,000
2,500
7,500

Diff
(500)
500
-

SR
P10
5

.24 Answer: A
Labor Yield Variance:
Expected Yield
Actual Yield
Difference
Multiply by Standard labor cost per unit
P1.5625*
Yield Variance
*Standard cost Standard Yield = P6,250 4,000 = P1.5625
.

25Answer: C
Direct labor cost at standard rate
Standard rate

40,000
36,000
4,000
P6,250U

7,150 750
6,400/800

6,400
8.00

.26 Answer: A
Actual cost
Favorable Rate Variance
Actual hours @ standard rate
Standard Rate: 11,000 2,000
Expected yield (400,000 units / 750 hrs) 7,500 = 40,000
.

10,000
1,000
11,000
5.50

27Answer: C
LEV: (20,000 21,000)6.15 = (6,150)F
Standard Rate:
3,000 = 126,000 20,000SR
123,000 = 20,000SR
SR = 6.15

.28 Answer: C
LEV: (410 x 20) 8,440 = (240)F
.29 Answer: C
Actual hours
Less Unfavorable hours
Standard hours allowed
Standard rate: 960,000/60,000
.

30Answer: B
SR = LEV (AH SH)
= -4,000 (29,000 30,000)

1,148,000/16.40
120,000/16

Labor Mix Variance

P (5,000)
2,500
P (2,500)Fav

70,000
7,500
62,500
16.00

= P4.00
.31 Answer: C
AR = SR (LRV AH)
AR = P4.00 (5,800 29,000)
= P3.80
.

32Answer: B
Variable OH rate/hr - P27,000 45,000
Direct labor rate/hr = P0.60 0.20
Variable OH is applied at 20% of direct labor cost
Actual hours P140,700 (P3 P0.20)
Unfavorable hours P5,100 P3
SH allowed

.33 Answer: B
Actual direct labor costs
Actual hrs at std labor rate
Unfavorable labor rate variance
Standard labor rate:
-3,200 = (34,500 35,000) SR
3,200 = 500SR
SR = 6.40

P 0.60
P 3.00
50,250
1,700
48,550

(34,500 x P6.4)

P241,500
220,800
P 20,700

.34 Answer: B
Actual hours = Labor rate variance (AR-SR)
P12,000 (P10 P9)
12,000 hours
.

35Answer: D
LRV = AH(AR SR)
-5,500 = 10,000(7.50 SR)
-5,500 10,000 = 7.5 SR
-0.55 = 7.50 SR
SR = 8.05

.36 Answer: D
The controllable variance is the sum of the spending variances plus the efficiency variance.
Variable overhead spending variance
P( 3,600)
Fixed overhead spending variance
P(10,000)
Variable overhead efficiency variance
P 6,000
Total controllable variance
P 7,600
The volume variance is not considered a controllable variance.
.37 Answer: A
Monthly budgeted fixed overhead
Applied fixed overhead
Unfavorable volume variance

(150,000/12)
(2,450 x 2 x 2.5)

.38 Answer: A
Variable OH per DLH 48,000/24,000

12,500
12,250
250
2.00

Actual overhead
Budgeted OH at standard hours:
Variable 21,000 x 2
Fixed
Favorable controllable/budget variance

147,000
42,000
108,000

150,000
( 3,000)

.39 Answer: A
Budgeted fixed overhead
Applied fixed overhead based on 80% achieved (24,000 x 3)
Unfavorable volume variance
Fixed overhead rate based on 27,000 hours: (81,000 27,000)
.40 Answer: D
Actual overhead
Less Budgeted OH at standard hours
Variable
32,000 x 5
160,000
Fixed
64,000
Unfavorable budget variance
.

Answer: C
Actual overhead
Budget at SH
Favorable controllable variance

230,000

(224,000)
6,000

14,000
15,600
( 1,600)

Answer: C
OH application rate based on DL cost
Applied overhead
Actual overhead
Overapplied Overhead

600,000/(50,000 x 6)
325,000 x 2

Answer: D
Actual overhead
Budget at standard hours:
Fixed OH
Variable OH (32,000 x 5)
Unfavorable controllable variance
Answer: B
Budgeted fixed overhead
Applied FOH
Unfavorable volume variance

81,000
72,000
9,000
3.00

200%
650,000
620,000
30,000
230,000

64,000
160,000

(30,000 x 2)
(25,000 x 2)

224,000
6,000

60,000
50,000
10,000

Answer: C
Efficiency variance = (AH SH) x SVOHR (14,000 13,500) 6 = 3,000 UNF
Standard hours: 4,500 x 3 13,500

Answer: D
Efficiency Variance = (31,500 30,000) 10
Standard hours: 20,000 units x 1.5 hours

15,000 Unfavorable

Answer: A
Fixed overhead rate per hour
Denominator hours (previous number)

8.50 6.00
40,000/2.5

Answer: B
Actual OH (10,300 + 19,500)
Less: Budgeted OH at actual hours (P2 x 9,500 hrs) + P10,000
Unfavorable spending variance
Answer: C
EV = (AH SH) SVOHR (14,000 13,500) 6
SH (4,500 x 3)

Answer: A
Fixed OH spending variance:
Actual Fixed OH - Budgeted Fixed OH (P315,000 P300,000)
Fixed OH volume variance:
(Budgeted Units Actual Units) x SFOH rate (50,000 55,000) x P6
Budgeted production: P300,000 P3 2 hours

Answer: D
Actual
Budget (4,500 x 2.40)
Favorable Budget variance

Answer: C

P15,000
15,750
P( 750)

P15,000 U
P(30,000)F

520,000
540,000
( 20,000)
540,000
520,000
20,000

P10,100
10,800
P( 700)

Answer: C
Fixed overhead per hour: 16 x 0.7
Annual fixed OH budget 5,000 x 12 x 11.20
Answer: B
Actual variable overhead
Variable OH applied
Unfavorable variable OH variance

P29,800
29,000
P 800

3,000U
13,500

Answer: A
Actual OH
Budgeted OH at actual hours (3,500 x P2.50) + P7,000
Favorable spending variance

Answer: A
Actual variable overhead
AH @ SVOHR (270,000 x 2)
Variable Oh spending variance, Favorable
AH @ SVOHR
SH @ SVOH (260,000 x 2)
Unfavorable VOH efficiency variance

2.50
16,000

62,400
62,000
400

11.20
672,000

Applied fixed overhead

Less: Favorable volume variance
Budgeted fixed overhead
.

Answer: A
Standard rate:
Excess rate
Actual rate

(3,000 x 3 x 3.50)

50,000/40,000
1,080/3,600

Answer: A
Applied fixed overhead
Less favorable volume variance
Budgeted fixed overhead

1.25
0.03
1.28
48,000
12,000
36,000

Answer: A
Unfavorable volume variance
Unfavorable VOH spending variance
Total
Net Unfavorable variance
Favorable fixed OH budget variance

25,000
18,000
43,000
2,000
41,000

Answer: A
Net OH variance, Unfavorable
Less: Unfavorable volume variance
Unfavorable spending variance
Favorable FOH budget variance

2,000
( 18,000)
( 25,000)
41,000

Answer: C
Budgeted fixed OH
Add: Favorable volume variance
Applied fixed overhead

500,000
12,000
512,000

Answer: A
Applied FOH (8,000 x 6)
Less: Favorable volume variance
Budgeted FOH

48,000
12,000
36,000

Answer: A
Budgeted fixed OH
(3,000,000 12 months)
Applied fixed OH
(26,000 @ 2 x 5)
Favorable volume variance
Fixed OH rate per hour (3,000,000 600,000)
Answer: B
Labor Efficiency: (53,500 52,000) 8
Variable OH Efficiency (53,500 52,000) 6
Total efficiency variance
Answer: D

31,500
875
30,625

12,000
9,000
21,000

250,000
260,000
( 10,000)F
5.00

Total variable overhead variance (80,000 90,000)

Variable overhead spending variance
Variable overhead efficiency variance
8,800 20

10,000 favorable
1,200 favorable
8,800 favorable
440 Favorable

Answer: D
Fixed overhead volume variance is a more meaningful variance in evaluating the use of the capacity.

Answer: B
Actual variable OH
Budgeted VOH at actual hours (80,000 x P3)
Unfavorable VOH spending variance

Answer: A
(38,000 units 50,000 units) x P8 P96,000

Answer: B
Spending [P315,000 (53,500 x P6)]
Efficiency [(53,500 52,000) x P6]

Answer: B
Spending [P260,000 (P3M 12)]
Volume [(26,000 25,000) x P10]

P250,000
240,000
P 10,000

P(6,000)
P 9,000
P10,000U
P10,000F

Answer: C
Actual fixed overhead
Budget fixed overhead
(4,000 hrs @ P20)
Unfavorable fixed OH Spending variance
Budgeted (denominator) hours
(40,000 units x 6 60)
Answer: B
Budget fixed overhead
Applied fixed overhead (38,000 x 0.10 x P20)
Unfavorable volume variance
Answer: A
Actual variable overhead
Budget at actual hours (4,200 x P4)
Favorable variable OH spending variance

P88,000
80,000
P 8,000
4,000

P80,000
76,000
P 4,000

P 16,400
16,800
P ( 400)

Answer: C
Unfavorable Efficiency Variance: (AH SH) SVOHR
(4,200 3,800) x P4 = 1,600 UNF
SH allowed (38,000 units x 1 10) = 3,800 hours

Answer: A
Actual variable overhead
Budgeted VOH at actual hours (17,200 x 6)
Variable overhead spending variance, UNF

108,500
103,200
5,300

VOH rate per hour (135,000 x 0.80) 18,000 hours

P6.00

Answer: C
The computation of variable overhead efficiency variance involves the comparison of the actual hours and
standard hours allowed by actual production.
(17,200 17,000) x P6
1,200 UNF
Standard hours allowed: 8,500 x 2
17,000

Answer: D
The amount of fixed overhead budget (spending) variance is calculated by subtracting from the actual fixed
overhead the amount of budgeted fixed overhead.
Actual fixed overhead
28,000
Budgeted fixed overhead (135,000 x 0.2)
27,000
Unfavorable fixed overhead budget variance
1,000

Answer: B
The amount of volume variance (denominator or over/underapplied fixed overhead variance) is calculated by
comparing the budgeted fixed overhead and fixed overhead applied to production.
Budgeted fixed overhead
(135,000 x 0.2)
27,000
Applied fixed overhead
(8,500 x 3)
25,500
Underapplied (unfavorable) volume variance
1,500
Alternative calculation:
(9,000 8,500) x 3
1,500
Fixed overhead per unit
(27,000 9,000)
3

Answer: C
Std unit cost:
Variable
Fixed OH
Std unit cost
CGS Std
OH Volume Variance:

(7,000,000 x 0.60) 140,000

(11,200,000 x 0.50) 160,000
(100,000 x 65)
(160,000 140,000) x 35

P30
35
P65
6,500,000
P 700,000 UNF

Answer: A
SQ allowed (22,500 x 6)
Unfavorable usage variance
Actual quantity of materials

135,000
3,000
138,000

Answer: C
Actual quantity purchased and used at standard price (138,000 x 3)
Favorable price variance
Actual Quantity @ Actual Price
Actual Price (407,100 138,000)

414,000
6,900
407,100
P2.95

Answer: C
SH @ SR
Efficiency Variance

90,000
7,000

AH @ SR
Actual hours (97,000 5)

97,000
19,400

Answer: D
AH @ SR (19,400 x 3)
Spending variance
Actual Variable Overhead

58,200
1,300
59,500

Answer: B
Applied Fixed OH
Underapplied fixed overhead
Budgeted fixed overhead

126,000
14,000
140,000

Answer: C
Denominator or Budgeted Hours: (140,000 7) = 20,000

Answer: C
MCE = Value Added Hours Throughput Time
Processing hours
8.00
Inspection hours
1.50
Waiting time
1.50
Move time
1.50
Throughput time
12.50
MCE (8.00 12.50)
64%

Answer: A

Answer: A
Delivery cycle time:
Total waiting time
Inspection time
Processing time
Move time
Delivery Cycle Time

15.00
1.50
3.00
2.50
22.00

Answer: C
A favorable volume variance arises when the applied fixed overhead is higher than the budgeted fixed overhead.
Budgeted fixed overhead
500,000
Favorable volume variance (overapplied)
12,000
Applied fixed overhead
512,000