Questions I to II are based on a monthly normal volume of 50,000 units (100,000 direct labor

hours). Raff Co.’s standard cost system contains the following overhead costs:
Variable P6 per unit
Fixed P8 per unit

The following information pertains to the month of March:

Units actually produced 38,000
Actual direct labor hours worked 80,000
Actual overhead incurred:
Variable P250,000
Fixed 384,000

I. For March, the unfavorable variable overhead spending variance was:

II. For March, the fixed overhead volume variance was:

Questions III to IV. Edney Company employs standard absorption system for product costing. The
standard cost of its product is as follows:
Raw materials P14.50
Direct labor (2 DLH x P8) 16.00
Manufacturing overhead (2 DLH x P11) 22.00
The manufacturing overhead rate is based upon a normal activity level of 600,000 direct labor hours.
Edney planned to produce 25,000 units each month during the year. The budgeted annual
manufacturing overhead is
Variable P3,600,000
Fixed 3,000,000
During November, Edney produced 26,000 units. Edney used 53,500 direct labor hours in November
at a cost of P433,350. Actual manufacturing overhead for the month was P260,000 fixed and
P315,000 variable. The total manufacturing overhead applied during November was P572,000.

III. The variable manufacturing overhead variances for November are:

IV. The fixed manufacturing overhead variances for November are:

The following information will be used to answer Question Nos. V to VIII:

Garch, Inc. analyzes manufacturing overhead in the production of its only one product, CD. The
following set of information applies to the month of May, 2006:
Budgeted Actual
Units produced 40,000 38,000
Variable manufacturing OH P 4/DLH P16,400
Fixed manufacturing overhead P20/DLH P88,000
Direct labor hours 6 min/unit 4,200 hr
V. What is the fixed overhead spending variance?
VI. What is the volume variance?
VII. How much was the variable overhead spending variance?
VIII. How much overhead efficiency variance resulted for the month of May?

Questions IX to XII are based on Darf Company, which applies overhead on the basis of direct
labor hours. Two direct labor hours are required for each product unit. Planned production for the
period was set at 9,000 units. Manufacturing overhead is budgeted at P135,000 for the period, of
which 20% of this cost is fixed. The 17,200 hours worked during the period resulted in production of
8,500 units. Variable manufacturing overhead cost incurred was P108,500 and fixed manufacturing
overhead cost was P28,000. Darf Company uses a four variance method for analyzing manufacturing
overhead.

IX. The variable overhead spending variance for the period is

X. The variable overhead efficiency variance (quantity) variance for the period is
XI. The fixed overhead budget (spending) variance for the period is
XII. The fixed overhead volume (denominator) variance for the period is
Ultra Shine Company manufactures a cleaning solvent. The company employs both skilled and
unskilled workers. To produce one 55-gallon drum of solvent requires Materials A and B as well as
skilled labor and unskilled labor. The standard and actual material and labor information is
presented below:

Standard:
Material A: 30.25 gallons @ P1.25 per gallon
Material B: 24.75 gallons @ P2.00 per gallon

Skilled Labor: 4 hours @ P12 per hour

Unskilled Labor: 2 hours @ P 7 per hour

Actual:
Material A: 10,716 gallons purchased and used @ P1.50 per gallon
Material B: 17,484 gallons purchased and used @ P1.90 per gallon

Skilled labor hours: 1,950 @ P11.90 per hour

Unskilled labor hours: 1,300 @ P7.15 per hour
During the current month Ultra Shine Company manufactured 500 55-gallon drums.

Round all answers to the nearest whole peso.

What is the total material price variance?

What is the total material mix variance?
What is the total material yield variance?
What is the labor rate variance?
What is the labor mix variance?
What is the labor yield variance?