NUBD uses a standard cost system for its production process. NUBD applies overhead based on direct labor hours. The following information is available for July: Standard: Direct labor hours per unit Variable overhead per hour Fixed overhead per hour (based on 11,990 DLHS) 2.20 P2.50 P3.00 Actual: Units produced Direct labor hours Variable overhead Fixed overhead 4,400 8,800 P29,950 P42,300
NUBD uses a standard cost system for its production process. NUBD applies overhead based on direct labor hours. The following information is available for July: Standard: Direct labor hours per unit Variable overhead per hour Fixed overhead per hour (based on 11,990 DLHS) 2.20 P2.50 P3.00 Actual: Units produced Direct labor hours Variable overhead Fixed overhead 4,400 8,800 P29,950 P42,300
NUBD uses a standard cost system for its production process. NUBD applies overhead based on direct labor hours. The following information is available for July: Standard: Direct labor hours per unit Variable overhead per hour Fixed overhead per hour (based on 11,990 DLHS) 2.20 P2.50 P3.00 Actual: Units produced Direct labor hours Variable overhead Fixed overhead 4,400 8,800 P29,950 P42,300
Using the four-variance approach, what is the variable overhead spending variance?
Transcribed Image Text:NUBD uses a standard cost system for its production process. NUBD applies
overhead based on direct labor hours. The following information is available for July:
Standard:
Direct labor hours per unit
Variable overhead per hour
Fixed overhead per hour
(based on 11,990 DLHS)
2.20
P2.50
P3.00
Actual:
Units produced
Direct labor hours
4,400
8,800
P29,950
P42,300
Variable overhead
Fixed overhead
Definition Definition Indirect costs incurred while producing goods or services. Overhead costs cannot be directly attributed to products or services. Overhead includes indirect material cost, indirect labor cost, rent, utilities expenses, and depreciation. Since these costs directly affect the profitability of a company, managing overhead becomes an important task for management.
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