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Requirement: Compute for the following variances 1. Fixed Spending Variance 2. Variable Spending Variance 3. Efficiency Variance

Requirement: Compute for the following variances 1. Fixed Spending Variance 2. Variable Spending Variance 3. Efficiency Variance

FINANCIAL ACCOUNTING
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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Requirement: Compute for the following variances
1. Fixed Spending Variance
2. Variable Spending Variance
3. Efficiency Variance
4. Controllable Variance
5. Volume Variance
6. Spending Variance

7. Total Variance

Factory overhead costs variances. The standard overhead cost for a product manufactured by Arabian Corporation is given below (normal capacity = 24,000 units): %3D Per unit Variable overhead : 15 mins. @.P6 Fixed overhead Total standard overhead rate P 1.50 1.25 P 2.75 : 15 mins. @ P5 Last period, the company produced 25,000 units and worked 6,400 actual direct labor hours. Overhead is applied to production on the basis of direct labor hours. Actual overheads cost are : váriable, P39,000; fixed, P29,000.
Transcribed Image Text:Factory overhead costs variances. The standard overhead cost for a product manufactured by Arabian Corporation is given below (normal capacity = 24,000 units): %3D Per unit Variable overhead : 15 mins. @.P6 Fixed overhead Total standard overhead rate P 1.50 1.25 P 2.75 : 15 mins. @ P5 Last period, the company produced 25,000 units and worked 6,400 actual direct labor hours. Overhead is applied to production on the basis of direct labor hours. Actual overheads cost are : váriable, P39,000; fixed, P29,000.
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