Standard Costing

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Budgeted Production Cost and Variance Analysis.
At the beginning of 2011, Jejemon Corporation adopted the following standards:
Direct Materials(3 lbs. @ P2.50 / lb)P 7.50
Direct Labor (5 hours @ P7.50 / hr)37.50
Factory Overhead:
Variable(P3.00 per direct labor hour)15.00
Fixed(P4.00 per direct labor hour)20.00
Standard Cost per unitP80.00

Normal volume per month is 40,000 standard labor hours. Jejemon’s january budget was based on normal volume. During January Jejemon’s produced 7,800 units, with records indicating the following:
Direct Materials purchased25,000 lbs @ P2.60
Direct Materials used23,100 lbs
Direct labor40,100 hours @ P7.30
Factory OverheadP300,000
Required:
1) Schedule of budgeted production costs based on actual production. 2) Variance Analysis (materials, labor, and overhead)
Determination of Standard and Actual Data
The production data of Long Company for the month of June show the following:

Total Manufacturing Cost VarianceP3,840 UF
Price Usage Variance1,600 UF
Material Cost Variance 440 UF
Labor Cost Variance4,200 F
Labor Rate Variance8,400 F

Other Data:
• The company paid P0.10 more than the standard price.
• Two (2) pieces of materials are required per unit of product. • An overabsorbed capacity of 200 units of product were noted when actual production ws compared with the normal volume of 8,000 untis. • Payroll showed total labor cost of P168,000.

• Workers are usually paid at an average of P4.20, though the records showed that the company paid less than this amount during the month. • Standard overhead rate amounts to P5 per direct labor hour, 40% of which is fixed.

Required: Determine the following:
1) Actual units produced in June.
2) Actual quantity of materials used for production.
3) Standard and actual price of materials per piece.
4) Total standard direct labor hours that should have been used...
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