The controller of Durham Skates is reviewing the production cost report for July.

An analysis of direct materials costs reflects an P6,600,000

unfavorable flexible budget variance of P25. The plant manager believes this is excellent performance on a flexible budget for During November, Richard produced 26,000 units. Richard used 53,500 direct labor hours in November at a cost of P433,350.
5,000 units of direct materials. However, the production supervisor is not pleased with this result because he claims to have Actual manufacturing overhead for the month was P250,000 fixed and P325,000 variable.
saved P1,200 in material cost on actual production using 4,900 units of direct materials. The standard materials cost is P12 per 7. The manufacturing overhead controllable variance for November is
unit. Actual materials used for the month amounted to P60,025. a. P9,000 unfavorable b. P9,000 favorable c. P13,000 unfavorable d. P4,000 favorable
1. The actual average cost per unit for materials was 8. The manufacturing overhead volume variance for November is:
a. P12.00 b. P12.24 c. P12.01 d. P12.25 a. P12,000 unfavorable b. P9,000 unfavorable c. P10,000 unfavorable d. P3,000 unfavorable
2. If the direct materials variance is investigated further, it will reflect a price variance of
a. Zero. b. P1,225 unfavorable. c. P1,200 favorable. d. P2,500 favorable. Beebo Company uses a standard cost system as a means of control for their manufacturing business. The firm has done an
analysis of its overhead cost behavior patterns relative to its activity base of direct labor hours (DLH), and reports the following
The following direct labor information pertains to the manufacture of product Glu: findings:
Time required to make one unit 2 direct labor hours Variable overhead
Number of direct workers 50 Indirect material P1.20 per DLH
Number of productive hours per week, per worker 40 Indirect labor 2.15 per DLH
Weekly wages per worker P500 Other indirect costs 3.45 per DLH
Workers’ benefits treated as direct labor costs 20% of wages Annual Fixed Costs
3. What is the standard direct labor cost per unit of product Glu? Salaries P100,000
a. P30. b. P15. c. P24. d. P12. Depreciation 14,000
Rent 30,000
4. JKL Company is using a direct labor cost standard of 4 hours and a P12 wage rate per hour for one of its products. Planned
production was 300 units, but actual production was 250 units, using for each unit 3 labor hours at a P13 wage rate. What Beebo’s annual budget is based on total production of 240,000 units, for which 2.5 DLH per unit is required. It may be assumed
is the labor price variance? that Beebo’s fixed costs and production activity occur evenly throughout the year.
a. P750 unfavorable. b. P1,200 favorable. c. P900 unfavorable. d. P750 favorable. During its first month of operations in the current year Beebo produced 22,000 units, logged 57,200 direct labor hours,and reported
Information on Rita Company’s direct labor costs is as follows: the following cost figures.
Standard direct labor rate P 3.75 Actual variable overhead costs P360,000
Actual direct labor rate P 3.50 Total fixed costs 14,000
Standard direct labor hours 10,000 9. Beebo’s predetermined overhead application rate is
Direct labor usage variance – unfavorable P 4,200 a. P6.80 per DLH b. P9.40 per DLH c. P7.04 per DLH d. P8.14 per DLH
5. What were the actual hours worked, rounded to the nearest hour? 10. Beebo’s overhead speanding variance for the month is
11,914 b. 11,120 c. 10,714 d. 11,200 a. P10,000 unfavorable. b. P28,688 favorable. c. P22,000 unfavorable. d. P26,960 favorable.
11. Beebo’s overhead efficiency variance for the month is
Peters Company uses a flexible budget system and prepared the following information for the year a. P14,960 unfavorable. b. P48,960 favorable. c. P15,488 unfavorable. d. P27,200 favorable.
Percentage of total capacity 12. Beebo’s overhead volume variance for the month is
80% 90% a. P528 unfavorable. b. P34,000 favorable. c. P1,200 favorable. d. P1,728 unfavorable.
Direct labor hours 24,000 27,000 13. Beebo’s applied overhead for the month was
Variable factory O/H P48,000 P54,000 a. Over by P28,688 b. Over by P14,960 c. Under by P22,000 E. d. Over by P13,200
Fixed factory O/H P108,000 P108,000
Total factory O/H rate per DLH P6.50 P6.00 Liberty Celebrations, Inc., manufactures a line of flags. The annual demand for its flag display is estimated to be 100,000 units.
The annual cost of carrying one unit in inventory is P1.60, and the cost to initiate a production run is P50. There are no flag
Peters operated at 80% capacity during the year but applied factory overhead based on the 90% capacity level.
displays on hand but Liberty had scheduled 60 equal production runs of the display sets for the coming year, the first of which is
6. Assuming that actual factory O/H was equal to the budgeted amount for the attained capacity, what is the amount of O/H
to be run immediately. Liberty Celebrations has 250 business days per year. Assume that sales occur uniformly throughout the
variance for the year?
year and that production is instantaneous.
a. P6,000 over b. P12,000 over c. P6,000 under d. P12,000 under
14. If Liberty Celebrations does not maintain a safety stock, the estimated total carrying cost for the flag displays for the
J. R. Richard Company employs a standard absorption system for product costing. The standard cost of its product is as follows: coming year is
Direct materials P14.50 a. P2,667. b. P2,000. c. P1,600. d. P1,333.
Direct labor (2 direct labor hours x P8) 16.00 15. If Liberty Celebrations were to schedule 30 equal production runs of the flag display for the coming year, instead of 60
Manufacturing overhead (2 direct labor hours x P11) 22.00 equal runs, the sum of carrying costs and setup costs for the coming year would increase (decrease) by
Total standard cost P52.50 a. P(166). b. P-0-. c. P166. d. P1,500.
The manufacturing overhead rate is based upon a normal activity level of 600,000 direct labor hours. Richard planned to produce 16. The number of production runs per year of the flag displays that would minimize the sum of carrying costs and setup costs
25,000 units each month during the year. The budgeted annual manufacturing overhead is: for the coming year is
a. 50. b. 40. c. 30. d. 20.
Variable P3,600,000
Fixed 3,000,000
Ziffel Company had the following account balances and results from operations for the month of July: direct materials consumed, Ziffel Company had the following account balances and results from operations for the month of July: direct materials consumed,
P10,400; direct labor, P8,000; factory overhead, P8,800; July 1, work in process inventory, P2,400; July 31, work in process P10,400; direct labor, P8,000; factory overhead, P8,800; July 1, work in process inventory, P2,400; July 31, work in process
inventory, P1,800; finished goods inventory, July 1, P1,200; finished goods inventory, July 31, P1,000. inventory, P1,800; finished goods inventory, July 1, P1,200; finished goods inventory, July 31, P1,000.
17. The cost of goods sold was: 17. The cost of goods sold was:
a. P27,200 b. P28,000 c. P27,800 d. P27,600 a. P27,200 b. P28,000 c. P27,800 d. P27,600
For Carroll Company, labor-hours are 12,500 and wages P47,000 at the high point of the relevant range, and labor-hours are For Carroll Company, labor-hours are 12,500 and wages P47,000 at the high point of the relevant range, and labor-hours are
7,500 and wages P35,000 at the low point of the relevant range. 7,500 and wages P35,000 at the low point of the relevant range.
18. What is the Fixed Cost? 18. What is the Fixed Cost?
a. P17,000 b. P12,000 c. P5,000 d. P41,750 a. P17,000 b. P12,000 c. P5,000 d. P41,750
19. What is the estimate of total labor costs at Carroll Company when 10,000 labor-hours are used? 19. What is the estimate of total labor costs at Carroll Company when 10,000 labor-hours are used?
a. P17,000 b. P41,000 c. P21,167 d. P27,000 a. P17,000 b. P41,000 c. P21,167 d. P27,000
Alfred, owner of Hi-Tech Fiberglass Fabricators Inc. is interested in using the reciprocal allocation method. The following data Alfred, owner of Hi-Tech Fiberglass Fabricators Inc. is interested in using the reciprocal allocation method. The following data
from operations were collected for analysis: from operations were collected for analysis:
Budgeted manufacturing overhead costs: Budgeted manufacturing overhead costs:
Plant Maintenance PM (Support Dept) P350,000 Plant Maintenance PM (Support Dept) P350,000
Data Processing DP (Support Dept) P 75,000 Data Processing DP (Support Dept) P 75,000
Machining M (Operating Dept) P225,000 Machining M (Operating Dept) P225,000
Capping C (Operating Dept) P125,000 Capping C (Operating Dept) P125,000
Services furnished: Services furnished:
By Plant Maintenance (budgeted labor-hours): By Data Processing (budgeted computer time): By Plant Maintenance (budgeted labor-hours): By Data Processing (budgeted computer time):
to Data Processing 3,500 to Plant Maintenance 600 to Data Processing 3,500 to Plant Maintenance 600
to Machining 5,000 to Machining 3,500 to Machining 5,000 to Machining 3,500
to Capping 8,200 to Capping 600 to Capping 8,200 to Capping 600
20. Which of the following linear equations represents the complete reciprocated cost of the Data Processing Department? 20. Which of the following linear equations represents the complete reciprocated cost of the Data Processing Department?
a. DP= P75,000 + (600/4,700) PM c. DP= P75,000 + (3,500/16,700) PM a. DP= P75,000 + (600/4,700) PM c. DP= P75,000 + (3,500/16,700) PM
b. DP= P75,000 x (600/4,700) + P350,000 x (3,340/16,700) d. DP= P350,000 + (600/16,700) DP b. DP= P75,000 x (600/4,700) + P350,000 x (3,340/16,700) d. DP= P350,000 + (600/16,700) DP
21. What is the complete reciprocated cost of the Plant Maintenance Department? 21. What is the complete reciprocated cost of the Plant Maintenance Department?
a. P393,750 b. P369,459 c. P365,000 d. P375,773 a. P393,750 b. P369,459 c. P365,000 d. P375,773
22. Product X is sold for P8 a unit and Product Y is sold for P12 a unit. Each product can also be sold at the splitoff point. 22. Product X is sold for P8 a unit and Product Y is sold for P12 a unit. Each product can also be sold at the splitoff point.
Product X can be sold for P5 and Product Y for P4. Joint costs for the two products totaled P4,000 for January for 600 Product X can be sold for P5 and Product Y for P4. Joint costs for the two products totaled P4,000 for January for 600
units of X and 500 units of Y. What are the respective joint costs assigned each unit of products X and Y if the sales value units of X and 500 units of Y. What are the respective joint costs assigned each unit of products X and Y if the sales value
at splitoff method is used? at splitoff method is used?
a. P2.96 and P4.44 b. P4.00 and P4.55 c. P4.00 and P3.20 d. P4.55 and P4.55 a. P2.96 and P4.44 b. P4.00 and P4.55 c. P4.00 and P3.20 d. P4.55 and P4.55
The Rest-a-Lot Chair Company manufacturers a standard recliner. During February, the firm's Assembly Department started The Rest-a-Lot Chair Company manufacturers a standard recliner. During February, the firm's Assembly Department started
production of 75,000 chairs. During the month, the firm completed 85,000 chairs and transferred them to the Finishing production of 75,000 chairs. During the month, the firm completed 85,000 chairs and transferred them to the Finishing
Department. The firm ended the month with 10,000 chairs in ending inventory. All direct materials costs are added at the Department. The firm ended the month with 10,000 chairs in ending inventory. All direct materials costs are added at the
beginning of the production cycle. Weighted-average costing is used by Rest-a-Lot. beginning of the production cycle. Weighted-average costing is used by Rest-a-Lot.
23. How many chairs were in inventory at the beginning of the month? Conversion costs are incurred uniformly over the 23. How many chairs were in inventory at the beginning of the month? Conversion costs are incurred uniformly over the
production cycle. production cycle.
a. 10,000 chairs b. 20,000 chairs c. 15,000 chairs d. 25,000 chairs a. 10,000 chairs b. 20,000 chairs c. 15,000 chairs d. 25,000 chairs
24. What were the equivalent units for materials for February? 24. What were the equivalent units for materials for February?
a. 95,000 chairs b. 85,000 chairs c. 80,000 chairs d. 75,000 chairs a. 95,000 chairs b. 85,000 chairs c. 80,000 chairs d. 75,000 chairs
25. What were the equivalent units for conversion costs for February if beginning inventory was 70% complete as to 25. What were the equivalent units for conversion costs for February if beginning inventory was 70% complete as to
conversion costs and ending inventory was 40% complete as to conversion costs? conversion costs and ending inventory was 40% complete as to conversion costs?
a. 89,000 b. 75,000 c. 85,000 d. 95,000 a. 89,000 b. 75,000 c. 85,000 d. 95,000