In good accounting form, compute for the:1. Spending variance2. Variable overhead efficiency variance3. Controllable varianceMarissa co., the consultant of marisol co. had summarized the following standard cost data extracted from the historical records and performance reports issued by the cost accounting department in the prior year to assist in her analysis and evaluation of the standard costing policy of the company: input required per unitstandard cost per unitstandard cost per unitDirect materials6 kg per unitp90 per kgp540Direct labor5 hrs per unitp50 per hourp250Other information follows:> Budgeted factory overhead for the year:Variable480,000Fixed600,000> The company's normal capacity per month is 400 units> Actual cost materials purchased for the year is p2,342,000> During the year, direct materials purchased is 26,880 kg while direct materials actually used is 24,760 kgs>Actual labor costs for the year 1,080,000 of which 24,900 direct labor hourse was consumed> Actual factory overhead amounted to 1,320,000, 65% of which is fixed cost, FOH is based on labor hours> Actual production during the year 5,150 units

1. Spending Variance : The difference between the actual and standard amount of expenses comprised…

Answered: In good accounting form, compute for…

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter10: Standard Costing And Variance Analysis

Section: Chapter Questions

Problem 28BEA: Variable Overhead Spending and Efficiency Variances, Columnar and Formula Approaches Rath Company...

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In good accounting form, compute for the:

1. Spending variance
2. Variable overhead efficiency variance
3. Controllable variance

Marissa co., the consultant of marisol co. had summarized the following standard cost data extracted from the historical records and performance reports issued by the cost accounting department in the prior year to assist in her analysis and evaluation of the standard costing policy of the company:

	input required per unit	standard cost per unit	standard cost per unit
Direct materials	6 kg per unit	p90 per kg	p540
Direct labor	5 hrs per unit	p50 per hour	p250

Other information follows:

> Budgeted factory overhead for the year:

Variable	480,000
Fixed	600,000

> The company's normal capacity per month is 400 units
> Actual cost materials purchased for the year is p2,342,000
> During the year, direct materials purchased is 26,880 kg while direct materials actually used is 24,760 kgs
>Actual labor costs for the year 1,080,000 of which 24,900 direct labor hourse was consumed
> Actual factory overhead amounted to 1,320,000, 65% of which is fixed cost, FOH is based on labor hours
> Actual production during the year 5,150 units

Definition Definition System of assigning an estimated cost to the product (instead of the actual cost) so that the product cost can be determined well in advance and the pricing of the product can be done on time. Since the actual cost cannot be predicted at the initial stage of the production process, the estimated cost is recorded in the books. Any deviation of the estimated cost of the actual cost is adjusted in the books at the end of the period.

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