Armstrong Products applies fixed overhead at a rate of P3 per direct labor hour. Each unit produced is expected to take 2 direct labor hours. Armstrong expected production in the current year to be 10,000 units but 9,000 units were actually produced. Actual direct labor hours were 19,000 and actual fixed overhead costs were P62,000. 7. Refer to the Armstrong Products information above. Armstrong's fixed overhead spending variance is: a. P8,000 F b. P8,000 U c. P2,000 F d. P2,000 U 8. Refer to the Armstrong Products information above. Armstrong's fixed overhead volume variance is: a. P2,000 b. P6,000 c. P8,000 d. P 0
Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
Armstrong Products applies fixed
7. Refer to the Armstrong Products information above. Armstrong's fixed overhead spending variance is:
a. P8,000 F
b. P8,000 U
c. P2,000 F
d. P2,000 U
8. Refer to the Armstrong Products information above. Armstrong's fixed overhead volume variance is:
a. P2,000
b. P6,000
c. P8,000
d. P 0
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