Spiral Company’s budgeted fixed factory overhead cost is P50,000 per month plus a variable factory overhead rate of P4 per direct labor hour. The direct labor hours for March production was 18,000. An analysis of the factory overhead indicates that in March, Spiral had an unfavorable spending variance of P1,000 and an unfavorable volume variance of P500. What is the applied factory overhead measured in March? Select one: P 122,500 P 123,000 P 122,000 P 121,500
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.
Spiral Company’s budgeted fixed
What is the applied factory overhead measured in March?
Select one:
- P 122,500
- P 123,000
- P 122,000
- P 121,500
Trending now
This is a popular solution!
Step by step
Solved in 3 steps with 1 images
