Activity 2 Standard direct labor hours budgeted for May production were 5,000, with factory overhead at that level budgeted at P25,000, of which P15,000 is variable. Actual labor hours for the month were 4,800; however, the number of standard labor hours allowed for actual May production is 5,200. Actual factory overhead incurred during the month was P25,600. Required: Compute the following variances and indicate whether each variance is favorable or unfavorable. a. Total spending variance b. Efficiency variance c. Volume variance d. Overall overhead variance
Activity 2 Standard direct labor hours budgeted for May production were 5,000, with factory overhead at that level budgeted at P25,000, of which P15,000 is variable. Actual labor hours for the month were 4,800; however, the number of standard labor hours allowed for actual May production is 5,200. Actual factory overhead incurred during the month was P25,600. Required: Compute the following variances and indicate whether each variance is favorable or unfavorable. a. Total spending variance b. Efficiency variance c. Volume variance d. Overall overhead variance
Chapter1: Financial Statements And Business Decisions
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Transcribed Image Text:Activity 2
Standard direct labor hours budgeted for May production were 5,000, with factory overhead at that level
budgeted at P25,000, of which P15,000 is variable. Actual labor hours for the month were 4,800;
however, the number of standard labor hours allowed for actual May production is 5,200. Actual factory
overhead incurred during the month was P25,600.
Required: Compute the following variances and indicate whether each variance is favorable or
unfavorable.
a. Total spending variance
b. Efficiency variance
c. Volume variance
d. Overall overhead variance
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