6. If Northern Vale was able to produce all of its annual capacity incurring a direct labor hours of 2% lesser than the total standard direct labor hours allowed but an actual rate of 5% higher than the standard rate, the unfavorable labor spending variance isa. P 142,800b. P 137,200c. P 8,925d. P 8,5757. Assuming that Mooniyan Division plans to produce 38,000 units of Sacred Hammers for the following year. How much should be the total budgeted factory overhead for the following year?a. 1,120,000b. 1,040,000c. 1,012,000d. 988,000 Northern Vale is one of the divisions of Moonton Company. Northern Vale produces "Iron Hook" and can currentlysell 75% of its annual capacity to outside customers. Mooniyan Division, another division of Moonton Company,developed "sacred hammer" which uses the "Iron Hook" as one of its direct materials plus another materials to bepurchased from outside suppliers. Mooniyan Division is working at full capacity and will require Northern Vale tosupply all the Iron Hooks that they need. All the divisions of Moonton Company uses standard costing and properlycontrols the costs and computes for variances.The standard cost in producing 1 unit of Iron Hook is as follows:Direct material (2.2 lbs @ P10/lb.)Php 22Direct labor (4 dlh @ P6/dlh)24Factory overhead30**30% fixed.**Budgeted annual fixed cost is P900,000The standard cost in producing 1 unit of Sacred Hammer is as follows:Iron Hook (1pc @ P80)Php 80Material X (1.5 lbs @ P20/lb.)30Direct labor (0.5 dlh @ P36/dlh)18Variable Factory overhead14Fixed Factory overhead12**Based on annual capacity of 40,000 unitsNorthern Vale currently sells the Iron Hook to outside customers at a mark-up of 10% on full standard cost whileMooniyan was able to find a supplier of Iron Hook at P80.

Name: 6. If Northern Vale was able to produce all of its annual capacity inc
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Description: 6. If Northern Vale was able to produce all of its annual capacity incurring a direct labor hours of 2% lesser than the total standard direct labor hours allowed but an actual rate of 5% higher than the standard rate, the unfavorable labor spending v

Variance analysisThe process of analyzing the actual performance with the budgeted values is called…

Business

Accounting

6. If Northern Vale was able to produce all of its annual capacity incurring a direct labor hours of 2% lesser than the total standard direct labor hours allowed but an actual rate of 5% higher than the standard rate, the unfavorable labor spending variance is a. P 142,800 b. P 137,200 c. P 8,925 d. P 8,575 7. Assuming that Mooniyan Division plans to produce 38,000 units of Sacred Hammers for the following year. How much should be the total budgeted factory overhead for the following year? a. 1,120,000 b. 1,040,000 c. 1,012,000 d. 988,000

6. If Northern Vale was able to produce all of its annual capacity incurring a direct labor hours of 2% lesser than the total standard direct labor hours allowed but an actual rate of 5% higher than the standard rate, the unfavorable labor spending variance is a. P 142,800 b. P 137,200 c. P 8,925 d. P 8,575 7. Assuming that Mooniyan Division plans to produce 38,000 units of Sacred Hammers for the following year. How much should be the total budgeted factory overhead for the following year? a. 1,120,000 b. 1,040,000 c. 1,012,000 d. 988,000

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter10: Decentralization: Responsibility Accounting, Performance Evaluation, And Transfer Pricing

Section: Chapter Questions

Problem 4CE

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