Cryolab Inc makes and sells a lawn fertilizer called Hypergro. The company has developed standard costs for one bag of Hypergro as follows: Standard Quantity/Hours Standard Price/Rate Standard Cost per Bag Direct Material 25 pounds ₱ 0.75 ₱18.75 Direct Labor 0.25 hours ₱69.00 ₱17.30 Variable overhead 0.25 hours ₱24.00 ₱ 6.00 Total ₱42.05 The company had no beginning inventories of any kind on January 1. Variable overhead is applied to production on the basis of standard direct labor hours. During January, the following activity was recorded by the company: Production of Fastgro: 23,000 bags Direct materials purchased: 585,000 pounds at a cost of ₱436,250 Direct labor worked: 5,800 hours at a cost of ₱397,300 Variable overhead incurred: ₱140,650 Inventory of direct materials on January 31: 8,000 pounds Compute the variances and indicate whether it is FAVORABLE (F) or UNFAVORABLE (U) in your solution sheet. The raw materials inventory at standards cost amounts to ₱_____________. The variable manufacturing overhead rate variance amounts to ₱_____________. The labor flexible budget/spending variance amounts to ₱____
Cryolab Inc makes and sells a lawn fertilizer called Hypergro. The company has developed
|
Standard Quantity/Hours |
Standard Price/Rate |
Standard Cost per Bag |
|
|
Direct Material |
25 pounds |
₱ 0.75 |
₱18.75 |
|
Direct Labor |
0.25 hours |
₱69.00 |
₱17.30 |
|
Variable overhead |
0.25 hours |
₱24.00 |
₱ 6.00 |
|
Total |
₱42.05 |
The company had no beginning inventories of any kind on January 1. Variable overhead is applied to production on the basis of standard direct labor hours. During January, the following activity was recorded by the company:
- Production of Fastgro: 23,000 bags
- Direct materials purchased: 585,000 pounds at a cost of ₱436,250
- Direct labor worked: 5,800 hours at a cost of ₱397,300
- Variable overhead incurred: ₱140,650
- Inventory of direct materials on January 31: 8,000 pounds
Compute the variances and indicate whether it is FAVORABLE (F) or UNFAVORABLE (U) in your solution sheet.
The raw materials inventory at standards cost amounts to ₱_____________.
The variable manufacturing overhead rate variance amounts to ₱_____________.
The labor flexible
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