119. Fixed overhead efficiency variance is nearest toA. P710 U B. P730 UC. P740 UD. P790 U WBC Co. uses a standard costing system. The absorption rate is based on labor hours. Data for April 2019 are as follows:Budget10,00010,000P45,000Labor hours workedStandard hours producedFixed overhead costActual11,13510,960P46,200

Fixed overhead efficiency variance = It means difference between Standard cost of Standard hours…

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119. Fixed overhead efficiency variance is nearest to A. P710 U B. P730 U C. P740 U D. P790 U

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

119. Fixed overhead efficiency variance is nearest to
A. P710 U
B. P730 U
C. P740 U
D. P790 U

WBC Co. uses a standard costing system. The absorption rate is based on labor hours. Data for April 2019 are as follows:
Budget
10,000
10,000
P45,000
Labor hours worked
Standard hours produced
Fixed overhead cost
Actual
11,135
10,960
P46,200

Definition Definition Indirect costs incurred while producing goods or services. Overhead costs cannot be directly attributed to products or services. Overhead includes indirect material cost, indirect labor cost, rent, utilities expenses, and depreciation. Since these costs directly affect the profitability of a company, managing overhead becomes an important task for management.

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