Exercise 3 (Labor and Variable Overhead Variances) Halliwell Audio, Inc., manufactures military-specification compact discs. The company uses standards to control its costs. The labor standards that have been set for one disc are as follows: Standard Hours Standard Cost P2.40 Standard Rate per Hour 24 minutes P6.00 During July, 8,500 hours of direct labor time were recorded to make 20,000 discs. The direct labor cost totaled P49,300 for the month. Required: 1. What direct labor cost should have been incurred to make the 20,000 discs? By how much does this differ from the cost that was incurred? 2. Break down the difference in cost from (1) above into a labor rate variance and a labor efficiency variance. 3. The budgeted variable manufacturing overhead rate is P4 per direct labor-hour. During July, the company incurred P39,100 in variable manufacturing overhead cost. Compute the variable overhead spending and efficiency variances for the month.

Exercise 3 (Labor and Variable Overhead Variances) Halliwell Audio, Inc., manufactures military-specification compact discs. The company uses standards to control its costs. The labor standards that have been set for one disc are as follows: Standard Hours Standard Cost P2.40 Standard Rate per Hour 24 minutes P6.00 During July, 8,500 hours of direct labor time were recorded to make 20,000 discs. The direct labor cost totaled P49,300 for the month. Required: 1. What direct labor cost should have been incurred to make the 20,000 discs? By how much does this differ from the cost that was incurred? 2. Break down the difference in cost from (1) above into a labor rate variance and a labor efficiency variance. 3. The budgeted variable manufacturing overhead rate is P4 per direct labor-hour. During July, the company incurred P39,100 in variable manufacturing overhead cost. Compute the variable overhead spending and efficiency variances for the month.

Name: Exercise 3 (Labor and Variable Overhead Variances)Halliwell Audio, In
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Description: Exercise 3 (Labor and Variable Overhead Variances)Halliwell Audio, Inc., manufactures military-specification compact discs.The company uses standards to control its costs. The labor standards thathave been set for one disc are as follows:Standard Ho

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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