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Problem 1:
Order Up, Inc., provides order fulfillment services for ecommerce merchants. The company maintains warehouses that stock
items carried by its clients. In the most recent month, 140,000 items were
shipped to customers using 5,800 direct labor-hours. The company
incurred a total of P15,950 to fulfill an order for one item. For the year,
Order Up expects to incur 60,000 direct labor hours and P168,000 of
variable overhead costs.
Compute the variable spending variance.
Problem 2:
The actual direct labor wage rate is P8.50 and 4,500
direct labor-hours were actually worked during the month. The standard
direct labor wage is P8 and the standard quantity of hours allowed for the
actual level of output was 5,000 direct labor-hours. The standard variable
overhead per direct labor-hour is P5.
What is the variable overhead efficiency variance if the variable
manufacturing overhead costs was P24,750?
Problem 3:
Edney Company employs standard absorption system
for product costing. The standard cost of its product is as follows:
Raw materials
Direct labor (2 DLH x P8)
Manufacturing overhead (2 DLH x P11)
P14.50
P16.00
P22.00
P3,600,000
3,000,000
Sales
Net operating income
Contribution Margin
Average operating assets
Stockholder's equity
Plant, property, & equipment
P900,000
P36,000
P150,000
P180,000
P100,000
P120,000
If the residual income for the year was P9,000, the required rate
of return percentage must have been:
Problem 5:
The Hum Division of the Ho Company reported the
following data for last year:
Sales
Operating expenses
Interest expense
Tax expense
Stockholder's equity
Average operating assets
Minimum required rate of return
P800,000
P650,000
P 50,000
P 30,000
P200,000
P600,000
12%