In a three-variance method of factory overhead analysis, the variance that

measures the difference between the factory overhead applied and the actual
hours worked multiplied by the standard rate is the:
Ans; Efficiency variance.

If a company follows a practice of isolating variances at the earliest point in time,

what would be the appropriate time to isolate and recognize a direct material
price variance?
Ans; When material is purchased

The following information pertains to the Braun Company for March: Standard
direct labor hours per unit = 0.5 hours; Budgeted production level = 20,000 units;
Actual units produced = 22,000 units; Standard variable = rate per direct labor
hour = P2.00; Standard fixed rate per direct labor hour = P3.00; Actual direct labor
hours worked = 10,500 hours; Actual direct labor costs = P150,000; Actual fixed
factory overhead = 31,800; Actual variable factory overhead = 22,200. Using the
four variance method of factory overhead variance analysis, what is the efficiency
variance?
Ans; P1,000 favorable

The following information is available from the Tomato Company: Actual factory
overhead = P16,500; Actual fixed overhead expenses = P 9,200; Budgeted fixed
overhead expenses = P 9,000; Actual hours = 3,600; Standard hours 3,800;
Variable overhead rate per direct labor hour = P 2.25. Assuming that Tomoto uses
a three variance analysis of overhead variances, what is the budget (spending)
variance?
Ans; P600 unfavorable

The materials purchase price variance, in a standard cost system, is obtained by

multiplying the:
Ans; Actual quantity purchased by the difference between actual price and
standard price.

The purpose of standard costing is to:

Ans; Control costs.
The following information pertains to the Braun Company for March: Standard
direct labor hours per unit = 0.5 hours; Budgeted production level = 20,000 units;
Actual units produced = 22,000 units; Standard variable rate per direct labor hour
= P2.00; Standard fixed rate per direct labor hour = P3.00; Actual direct labor
hours worked = 10,500 hours; Actual direct labor costs = P150,000; Actual fixed
factory overhead = 31,800; Actual variable factory overhead = 22,200. Using the
four variance method of factory overhead variance analysis, what is the volume
variance?
Ans; P3,000 favorable

The following information pertains to the Braun Company for March: Standard
direct labor hours per unit = 0.5 hours; Budgeted production level = 20,000 units;
Actual units produced = 22,000 units; Standard variable = rate per direct labor
hour = P2.00; Standard fixed rate per direct labor hour = P3.00; Actual direct labor
hours worked = 10,500 hours; Actual direct labor costs = P150,000; Actual fixed
factory overhead = 31,800; Actual variable factory overhead = 22,200. Using the
four variance method of factory overhead variance analysis, what is the budget
variance?
Ans; P1,800 unfavorable

Thomas Company uses a standard cost system and recognizes the materials
purchase price variance at the time materials are purchased. Information for raw
materials for Product RBI for the month of October follows: Standard unit price =
P1.75; Actual purchase price per unit = P1.65; Actual quantity purchased = 4,000
units; Actual quantity used = 3,900 units; Standard quantity allowed for actual
production = 3,800 units. What is the materials purchase price variance?
Ans; P400 favorable

Donellan Company has a standard and flexible budgeting system and uses a two-
way analysis of overhead variances. Selected data for the February production
activity follows: Budgeted fixed factory overhead costs = P 70,000; Actual factory
overhead incurred P 250000. Variable factory overhead rate per direct labor hour
= P7; = Standard direct labor hours = 25,000; Actual direct labor hours = 26,000.
The controllable variance for February is:
Ans; P5,000 unfavorable.

If the total materials variance (actual cost of materials used compared with the
standard cost of the standard amount of materials required) for a given operation
is favorable, why must this variance be further evaluated as to price and usage?
Ans; It is done so that management can evaluate the efficiency of the purchasing
and production functions.

Information on Shonda Company's factory overhead costs follows: Actual variable

factory overhead = P95,000; Actual fixed factory overhead = P28,000; Standard
hours allowed for actual production = 30,000; Standard variable overhead rate
per direct labor hour = P3.25; Standard fixed overhead rate per direct labor hour
= P1.00. What is the total factory overhead variance?
Ans; P4,500 favorable

The following information pertains to the Brain

Company for March: Standard direct labor hours per unit = 0.5 hours, Budgeted
production level = 20,000 units; Actual units produced = 22,000 units; Standard
variable rate per direct labor hour = P2.00; Standard fixed rate per direct labor
hour P3.00; Actual direct labor hours worked = 10,500 hours; Actual direct labor
costs = P150,000; Actual fixed factory overhead = 31,800; Actual variable factory
overhead = 22,200. Using the four variance method of factory overhead variance
analysis, what is the spending variance?
Ans; P1,200 unfavorable