1) The following information pertains to Boomerang Company's direct labor for March: Standard DL hours-21,000; Actual DL hours - 20,000; Labor rate variance - P8,400 Favorable; Standard labor rate / hr is P6.30. What was the total actual labor cost for March?

2.In September, Cottons Company produced 1,000 units of product. 2,080 units of raw materials were used at a total cost of P303,680. The actual direct labor hours used were equivalent to 97.60% of the standard direct labor hours at a cost of P62,464. Cottons standard costs to produce one unit of its product in thousands is: a. 2 units of raw material at P150 per unit; b. 1/2 hour of DL at P125 per hour.

A) The direct labor rate variance is?

B) the direct labor efficiency variance is?

3.The following information pertains to Blue Lion Co's 202x manufacturing operations: Standard direct labor hours/unit is 2; Actual direct labor hours is 10,500; Number of units produced is 5,000; standard variable OH/ Hr is P3 and Actual variable OH is P28,000. The company's variable overhead efficiency variance must be?

4.The Six-C Corporation uses a standard costing system in which variable factory overhead is assigned to production on the basis of the number of machine setups. The following data pertain to one month's operations: Manufacturing overhead cost incurred - P70,000; Total Variable Overhead variance - P4,550 favorable; Standard machine setups allowed for actual production -3,550; Actual machine setups incurred - 3,500.

A) The standard variable overhead rate per machine setup is:

B)Using the data of Six-C Corporation, the variable overhead spending variance is:

 

1.) Total actual labor cost for March = P117,600.

2.)

A) Direct labor rate variance = P1,464 Unfavorable

B) Direct labor efficiency variance = P1,500 Favorable

3.) Variable overhead efficiency variance = P1,500 Unfavorable

4.)

A) Standard variable overhead rate per machine setup = P21 per setup

B) Variable overhead spending variance = P3,500 Favorable

Step-by-step explanation

Solutions:

1.) Actual DL hours = 20,000 hrs

x Standard labor rate = P6.30/hr

Budgeted labor cost = P126,000

Less: Labor rate variance=P8,400

Actual labor rate variance = P117,600

Labor rate variance is deducted since it is favorable, which means that the actual cost must be lower than the budgeted cost.

2.) Direct labor rate variance is computed as:

Standard direct labor hours (0.5 hr/unit x 1,000 units) = 500 hrs

x 97.60% of actual labor hours

Actual direct labor hours = 488 hrs

x Standard labor rate = P125/hr

Budgeted labor cost = P61,000

Less: Actual labor cost = P62,464

Direct labor rate variance = P1,464 Unfavorable, because the actual labor cost is higher than budgeted labor cost.

Direct labor efficiency variance is computed as:

Actual direct labor hours = 488 hours

Less: Standard direct labor hours = 500 hours

Variance in labor hours = 12 hours

x Standard labor rate = P125/hr

Direct labor efficiency variance = P1,500 Favorable, because the actual hours worked is lower than standard hours.

3.) Variable overhead efficiency variance is computed as:

Actual direct labor hours = 10,500

Less: Standard direct labor hours (5,000 units produced x 2 hrs/unit) = 10,000

Variance in direct labor = 500 hrs

x Standard variable overhead rate = P3 per hour

Variable overhead efficiency variance = P1,500 Unfavorable, because the actual direct labor hours is higher than the standard direct labor hours.

4.) Standard variable overhead rate per machine setup is computed as:

Overhead cost incurred=P70,000

Add: Favorable variable overhead variance = P4,550

Standard variable overhead cost = P74,550

÷ Standard machine setups allowed for actual production = 3,550 setups

Standard variable overhead rate per machine setup = P21 per setup

Variable overhead spending variance is computed as:

Actual machine setups = 3,500

x Standard variable overhead rate = P21 per setup

Budgeted variable overhead = P73,500

Less: Actual overhead cost = P70,000

Variable overhead spending variance = P3,500 Favorable, because the actual cost incurred is lesser than budgeted cost.