Beruflich Dokumente
Kultur Dokumente
CPA
BOARD EXAMS
OUTLINES
by theMahatma
#1
VARIANCE
ANALYSIS
Based on lectures by Rodelio Roque, CPA (CPAR)
DEFINITIONS
x
x
x
Actual price/unit
Standard price/unit
Standard price/unit
= A
= B
= C
this is multiplied with actual hours (or some other actual basis),
applied overhead emerges. Also, any over- (under-) application of
overhead can be deducted (added) from the budgeted overhead
for the applied overhead
OTHER NOTES
The
Pangit A Co. has made the following information available for the
month of June. Fixed overhead was estimated at 19,000 machine
hours for the production cycle. Actual machine hours were 18,900 for
the period, which generated 3,900 units. The following are also
available:
Material purchased (80,000 pieces)
Php 314,000
Material quantity variance
Php 6,400 U
Machine hours used
18,900
VOH spending variance
Php 50 U
Actual fixed overhead
Php 60,000
Actual labor cost
Php 40,120
Actual labor hours
5,900
Standard direct material
20 piece @ Php 4/piece
Standard direct labor
1.5 hours @ Php 6/hour
Standard VOH
4.8 hours @ Php 2.50/hour
Standard FxdOH
4.8 hours @ Php 3/hour
ILLUSTRATION (CPAR FIRST PRE-BOARD EXAM 2016 ITEM)
Solve for: (a) materials price variance, (b) conversion cost efficiency
variance, and (c) fixed overhead non-controllable variance
SOLUTIONS AND EXPLANATIONS:
(A)
(B)