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Surgical Supply manufactures latex surgical gloves. It takes 0.85 square feet of latex to manufacture a pair of gloves. The standard
price for material is P0.80 per square foot. Most processing is done by machine; the only labor required is for operators, who are
paid P25 per hour. The machines can produce 400 pairs of gloves per hour.
During one week in May, Surgical produced 30,000 pairs of gloves and experienced a P1,500 unfavorable material quantity
variance. The company had purchased 1,500 more square feet of material than it used in production that week, producing an
unfavorable price variance of P570. Based on 77 total actual labor hours to produce the gloves, a P104 favorable total labor
variance was generated. Determine the following amounts:
A manufacturer of radios purchases components from subcontractors for assembly into complete radios. Each radio
requires three units each of Part X, which has a standard cost of P2.90 per unit. During June, the company had the
following experience with respect to Part X: Beginning Inventory – 3,000 at a total cost of P8,850, Purchases of 12,000 for
a total cost of P36,000, consumed 11,000 in manufacturing 3,000 radios.
1. Prepare the entry to record purchases using method 3.
2. Prepare the journal entry to record issuance using method 2.
3. Prepare the journal entry to record issuance using method 3.
The Jurcevich Corporation manufactures and sells a single product. A
standard cost system is used by the company. The standard factory
overhead cost for a unit of product is as follows:
Variable overhead
(1.5 hours @ P3 per hour) P4.50
Fixed overhead
1.50
(1.5 hours @ P1 per hour)
Total standard cost per unit P6.00
The overhead cost per unit was calculated for the year based on a
60,000 unit volume as follows: