During the period, Goku Company produced 8,000 units and applied overhead based on the direct labor hours. The standard cost card showed the following information: Standard Direct labor hours per unit 3 Actual Direct labor hours 25,000 Standard Fixed overhead per DLH P1.90 Standard Variable overhead per DLH P2.20 Budgeted variable overhead P48,000 Actual Variable overhead cost P51,000 Budgeted fixed overhead P55,000 Actual Fixed overhead cost P57,500 Need solution, answer is given What is the variable overhead spending variance? 4,000 F What is the fixed overhead volume variance? 9,400 UF
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.
- During the period, Goku Company produced 8,000 units and applied
overhead based on the direct labor hours. Thestandard cost card showed the following information:
Standard Direct labor hours per unit 3
Actual Direct labor hours 25,000
Standard Fixed overhead per DLH P1.90
Standard Variable overhead per DLH P2.20
Budgeted variable overhead P48,000
Actual Variable overhead cost P51,000
Budgeted fixed overhead P55,000
Actual Fixed overhead cost P57,500
Need solution, answer is given
What is the variable overhead spending variance? 4,000 F
What is the fixed overhead volume variance? 9,400 UF
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