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1. Ashton Company produces Product A. Among the materials used are aluminum strips. According to the standards established based on the normal capacity level, three pieces of aluminum strips should be used for each product at a standard price of P0.60 per piece. For the month of November 2023, budgeted production was 5,100 units of Product A. During the month, however, records showed the following: Actual production: 4,000 units Aluminum strips purchased in November: 11,800 pieces at P0.62 Increase in inventory during November: 3,700 pieces For the aluminum strips, compute the following (show your solution): a. Budgeted quantity b. Budgeted cost c. Actual cost d. Standard quantity e. Standard cost f. Standard cost variance g. Price variance h. Quantity variance 2. During the month, 1,200 units of Product LTK were produced. Actual direct labor hour required was 600 direct labor hours at an actual cost of $6,060. a. Budgeted labor hours b. Budgeted labor cost c. Actual labor rate d. Standard labor hours According to the standard cost card for the product, 0.6 of labor hour should be required for each unit of the product produced. Standard cost is $10 per labor hour. The standards were based on production level of 1,100 units. Compute the following (show your solution): e. Standard labor cost f. Total labor cost variance g. Rate variance h. Efficiency variance

1. Ashton Company produces Product A. Among the materials used are aluminum strips. According to the standards established based on the normal capacity level, three pieces of aluminum strips should be used for each product at a standard price of P0.60 per piece. For the month of November 2023, budgeted production was 5,100 units of Product A. During the month, however, records showed the following: Actual production: 4,000 units Aluminum strips purchased in November: 11,800 pieces at P0.62 Increase in inventory during November: 3,700 pieces For the aluminum strips, compute the following (show your solution): a. Budgeted quantity b. Budgeted cost c. Actual cost d. Standard quantity e. Standard cost f. Standard cost variance g. Price variance h. Quantity variance 2. During the month, 1,200 units of Product LTK were produced. Actual direct labor hour required was 600 direct labor hours at an actual cost of $6,060. a. Budgeted labor hours b. Budgeted labor cost c. Actual labor rate d. Standard labor hours According to the standard cost card for the product, 0.6 of labor hour should be required for each unit of the product produced. Standard cost is $10 per labor hour. The standards were based on production level of 1,100 units. Compute the following (show your solution): e. Standard labor cost f. Total labor cost variance g. Rate variance h. Efficiency variance

Managerial Accounting
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter9: Evaluating Variances From Standard Costs
Section: Chapter Questions
Problem 3E: Salisbury Bottle Company manufactures plastic two-liter bottles for the beverage industry. The cost...
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1. Ashton Company produces Product A. Among the materials used are aluminum strips. According to the standards established based on the normal capacity level, three pieces of aluminum strips should be used for each product at a standard price of P0.60 per piece. For the month of November 2023, budgeted production was 5,100 units of Product A. During the month, however, records showed the following: Actual production: 4,000 units Aluminum strips purchased in November: 11,800 pieces at P0.62 Increase in inventory during November: 3,700 pieces For the aluminum strips, compute the following (show your solution): a. Budgeted quantity b. Budgeted cost c. Actual cost d. Standard quantity e. Standard cost f. Standard cost variance g. Price variance h. Quantity variance 2. During the month, 1,200 units of Product LTK were produced. Actual direct labor hour required was 600 direct labor hours at an actual cost of $6,060. According to the standard cost card for the product, 0.6 of labor hour should be required for each unit of the product produced. Standard cost is $10 per labor hour. The standards were based on production level of 1,100 units. Compute the following (show your solution): a. Budgeted labor hours b. Budgeted labor cost c. Actual labor rate d. Standard labor hours e. Standard labor cost f. Total labor cost variance g. Rate variance h. Efficiency variance
Transcribed Image Text:1. Ashton Company produces Product A. Among the materials used are aluminum strips. According to the standards established based on the normal capacity level, three pieces of aluminum strips should be used for each product at a standard price of P0.60 per piece. For the month of November 2023, budgeted production was 5,100 units of Product A. During the month, however, records showed the following: Actual production: 4,000 units Aluminum strips purchased in November: 11,800 pieces at P0.62 Increase in inventory during November: 3,700 pieces For the aluminum strips, compute the following (show your solution): a. Budgeted quantity b. Budgeted cost c. Actual cost d. Standard quantity e. Standard cost f. Standard cost variance g. Price variance h. Quantity variance 2. During the month, 1,200 units of Product LTK were produced. Actual direct labor hour required was 600 direct labor hours at an actual cost of $6,060. According to the standard cost card for the product, 0.6 of labor hour should be required for each unit of the product produced. Standard cost is $10 per labor hour. The standards were based on production level of 1,100 units. Compute the following (show your solution): a. Budgeted labor hours b. Budgeted labor cost c. Actual labor rate d. Standard labor hours e. Standard labor cost f. Total labor cost variance g. Rate variance h. Efficiency variance
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