LOFAT Co. uses the two-way variance analysis for overhead performance. The budgeted factory overhead includes monthly fixed costs of P1,200,000 plus variable costs of P96 per direct labor hour. Total standard direct labor hours allowed for the May, 2021 production was 43,200 hours. Analysis showed that, in May 2021, the controllable variance of P24,000 is unfavorable while the volume variance of P12,000 is favorable. How much was the applied factory overhead in May 2021? a. P5,335,200 b. P5,359,200 c. P5,347,200 d. P5,371,200

FINANCIAL ACCOUNTING
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Chapter1: Financial Statements And Business Decisions
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LOFAT Co. uses the two-way variance analysis for overhead performance. The budgeted factory overhead 
includes monthly fixed costs of P1,200,000 plus variable costs of P96 per direct labor hour. Total standard 
direct labor hours allowed for the May, 2021 production was 43,200 hours. Analysis showed that, in May
2021, the controllable variance of P24,000 is unfavorable while the volume variance of P12,000 is favorable. 
How much was the applied factory overhead in May 2021?
a. P5,335,200
b. P5,359,200
c. P5,347,200
d. P5,371,200

 

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