The amount of budgeted overhead costs at normal capacity of P240,000 was divided by normal capacity of 30,000 direct labor hours to arrive at the predetermined overhead rate of P8, comprised of a variable overhead rate of P5 and a fixed rate of P3. Actual overhead for December was P15,800 variable and P9,100 fixed and standard hours allowed for the product produced in December was 3,000 hours. The total overhead variance is a. P900 Unfavorable b. P4,900 Favorable c. P900 Favorable d. P4,900 Unfavorable
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.
The amount of budgeted
a. P900 Unfavorable
b. P4,900 Favorable
c. P900 Favorable
d. P4,900 Unfavorable
Please insert your solutions and explanations. Thank you!!
Step by step
Solved in 2 steps
