29. The flexible budget of Spider Company is summarized below: Variable overhead Fixed overhead Total factory overhead Percent of normal operating capacity 90% 100% P 23,000 50,000 P 25,000 50,000 P 73,000 P 75,000 C. 4.00 d. 5.00 80% P 21,000 50,000 P 71,000 100,000 of units of product are produced when the company operates at its normal capacity. The standard labor time per unit is 15 minutes. Actual production for the year was 90,000 units of product in 44,000 hours. What is the standard variable factory overhead rate per hour? a. 1.00 b. 1.25 110% P 27,000 50,000 P 77,000 NOTE: Based on 100% operating capacity the variable rate is: P 25,000 ÷ 25,000 hours = P1 Flexible budget formula: FOH= 50,000+ 1 X, where 'X' is based on the number of hours. 30. Using data in No. 29, what is the budgetary factory overhead adjusted to standard hours? a. 22,500 b. 50,000 c. 72,500 d. 75,000 31. Information on Caterpillar Company's overhead costs is as follows:
Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
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Correct Answer
30.C
34.D
35.A
![29. The flexible budget of Spider Company is summarized below:
Variable overhead
Fixed overhead
Total factory overhead
Percent of normal operating capacity
80%
90%
100%
P 23,000
P 21,000
50,000
P 25,000
50,000
50,000
P 71,000 P 73,000 P 75,000
C. 4.00
d. 5.00
100,000 of units of product are produced when the company operates at its normal capacity. The
standard labor time per unit is 15 minutes. Actual production for the year was 90,000 units of
product in 44,000 hours. What is the standard variable factory overhead rate per hour?
a. 1.00
b. 1.25
110%
P 27,000
50,000
P 77,000
NOTE: Based on 100% operating capacity the variable rate is: P 25,000 ÷ 25,000 hours = P 1
Flexible budget formula: FOH = 50,000 + 1 X, where 'X' is based on the number of hours.
30. Using data in No. 29, what is the budgetary factory overhead adjusted to standard hours?
a. 22,500
b. 50,000
c. 72,500
d. 75,000
31. Information on Caterpillar Company's overhead costs is as follows:](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F6cc61053-2af4-4cb3-99b9-e7644db3bc4c%2F1b4347b9-63ec-4fa3-86dd-3619ba624049%2Fxsjznlb_processed.jpeg&w=3840&q=75)
![Items 34 and 35 are based on the following information
Ant Company's budgeted fixed factory overhead cost is P 50,000 per month plus a variable factory overhead
rate of P 4 per direct labor hour. The standard direct labor hours allowed for October production was
18,000. An analysis of the factory overhead indicates that in October, Ant had an unfavorable budget
(controllable) variance of P 1,000 and an unfavorable volume variance of P 500. Ant uses a two-way analysis
of overhead variance.
34. What is the actual factory overhead measured in October?
a. P 121,000
b. P 122,000
C. P 122,500
d. P 123,000
35. What is the applied (standard) factory overhead in October?
a. P 121,500
b. P 122,000
C. P 122,500
d. P 123,000
36. Under the three-variance method for analyzing factory overhead, budget or spending variance is
computed by subtracting from actual factory overhead costs incurred the
a. Budget allowance based on actual input
b. Budget allowance based on actual output
c. Budget allowance based on standard input
Budget allowance based on standard output
d.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F6cc61053-2af4-4cb3-99b9-e7644db3bc4c%2F1b4347b9-63ec-4fa3-86dd-3619ba624049%2Ftee3iad_processed.jpeg&w=3840&q=75)
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