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A company that produces a single product had the following information: Standards Direct labor . 5 hrs P15. 00 per hour The planned production during the month is 3, 000 units and the standard variable overhead rate is P10 per direct labor hour. The company applies variable overhead on the basis of direct labor-hours. The company reported the following results for the actual production during the month. Actual output 3, 200 units Actual direct labor-hours 1, 536 hours Actual direct labor cost P23, 808 Actual variable overhead cost P18, 432 Compute the following: 1. Direct labor rate variance P (indicate if favorable or unfavorable) 2. Direct labor efficiency variance P (indicate if favorable or unfavorable) 3. Variable overhead rate variance P (indicate if favorable or unfavorable) 4. Variable overhead efficiency variance P (indicate if favorable or unfavorable)

A company that produces a single product had the following information: Standards Direct labor . 5 hrs P15. 00 per hour The planned production during the month is 3, 000 units and the standard variable overhead rate is P10 per direct labor hour. The company applies variable overhead on the basis of direct labor-hours. The company reported the following results for the actual production during the month. Actual output 3, 200 units Actual direct labor-hours 1, 536 hours Actual direct labor cost P23, 808 Actual variable overhead cost P18, 432 Compute the following: 1. Direct labor rate variance P (indicate if favorable or unfavorable) 2. Direct labor efficiency variance P (indicate if favorable or unfavorable) 3. Variable overhead rate variance P (indicate if favorable or unfavorable) 4. Variable overhead efficiency variance P (indicate if favorable or unfavorable)

FINANCIAL ACCOUNTING
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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A company that produces a single product had the following information: Standards Direct labor . 5 hrs P15 . 00 per hour The planned production during the month is 3, 000 units and the standard variable overhead rate is P10 per direct labor hour. The company applies variable overhead on the basis of direct labor-hours . The company reported the following results for the actual production during the month. Actual output 3, 200 units Actual direct labor-hours 1, 536 hours Actual direct labor cost P23, 808 Actual variable overhead cost P18 , 432 Compute the following: 1. Direct labor rate variance P (indicate if favorable or unfavorable) 2. Direct labor efficiency variance P (indicate if favorable or unfavorable) 3. Variable overhead rate variance P (indicate if favorable or unfavorable) 4. Variable overhead efficiency variance P (indicate if favorable or unfavorable)
Transcribed Image Text:A company that produces a single product had the following information: Standards Direct labor . 5 hrs P15 . 00 per hour The planned production during the month is 3, 000 units and the standard variable overhead rate is P10 per direct labor hour. The company applies variable overhead on the basis of direct labor-hours . The company reported the following results for the actual production during the month. Actual output 3, 200 units Actual direct labor-hours 1, 536 hours Actual direct labor cost P23, 808 Actual variable overhead cost P18 , 432 Compute the following: 1. Direct labor rate variance P (indicate if favorable or unfavorable) 2. Direct labor efficiency variance P (indicate if favorable or unfavorable) 3. Variable overhead rate variance P (indicate if favorable or unfavorable) 4. Variable overhead efficiency variance P (indicate if favorable or unfavorable)
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