Lang Company’s budgeted fixed factory overhead cost is Php 125,000 per month plus a variable factory overhead of Php5 per direct labor hour. The standard direct labor hours allowed for January production was 45,000. An analysis of the factory overhead indicates that in January, Lang had an unfavorable volume variance of Php 2,500. Lang uses a two- way analysis of overhead variance 21. Determine the actual factory overhead measured in January a. Php 355,000 b. Php 350,000 c. Php 347,500 d. Php 352,500 22. Determine the standard factory overhead in January a. Php 355,000 b. Php 350,000 c. Php 347,500 d.Php 352,500
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.
Lang Company’s budgeted fixed
variable factory overhead of Php5 per direct labor hour. The standard direct labor hours
allowed for January production was 45,000. An analysis of the factory overhead indicates
that in January, Lang had an unfavorable volume variance of Php 2,500. Lang uses a two-
way analysis of overhead variance
21. Determine the actual factory overhead measured in January
a. Php 355,000
b. Php 350,000
c. Php 347,500
d. Php 352,500
22. Determine the standard factory overhead in January
a. Php 355,000
b. Php 350,000
c. Php 347,500
d.Php 352,500
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