Deems Company's budgeted fixed factory overhead cost is P50,000 per month plus a variable factory overhead rate of P4 per direct labor hour. The standard direct labor hours allowed for November production was 18,000. An analysis of the factory overhead indicates that in November, Deems had an unfavorable budget (controllable) variance of P1,000 and a favorable volume variance of P500. Deems uses a two-way analysis of overhead variance

Deems Company's budgeted fixed factory overhead cost is P50,000 per month plus a variable factory overhead rate of P4 per direct labor hour. The standard direct labor hours allowed for November production was 18,000. An analysis of the factory overhead indicates that in November, Deems had an unfavorable budget (controllable) variance of P1,000 and a favorable volume variance of P500. Deems uses a two-way analysis of overhead variance

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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Deems Company's budgeted fixed factory overhead cost is P50,000 per month plus a variable factory overhead rate of P4 per direct labor hour. The standard direct labor hours allowed for November production was 18,000. An analysis of the factory overhead indicates that in November, Deems had an unfavorable budget (controllable) variance of P1,000 and a favorable volume variance of P500. Deems uses a two-way analysis of overhead variance The applied factory overhead in November is: O P122,500 O P123,000 O P121.000 O P122,000