The following data were gathered from the Pal Company's overhead costs for the January, 2020 production activity: Actual total overhead incurred - P112,500 Budgeted fixed overhead - P40,500 Standard direct-labor hours allowed for actual production - 15,000 Standard fixed overhead rate per direct-labor hour - P2.25 Standard variable overhead rate per direct-labor hour - P3.25 Pal Company has been maintaining a standard absorption and flexible budgeting system. It also uses the two-variance method (two-way) for overhead variances. What is Pal's volume (denominator) variance for January, 2020? P6,750F P8,250F P6,750U P8,250U
Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
The following data were gathered from the Pal Company's
Actual total overhead incurred - P112,500
Budgeted fixed overhead - P40,500
Standard direct-labor hours allowed for actual production - 15,000
Standard fixed overhead rate per direct-labor hour - P2.25
Standard variable overhead rate per direct-labor hour - P3.25
Pal Company has been maintaining a standard absorption and flexible budgeting system. It also uses the two-variance method (two-way) for overhead variances. What is Pal's volume (denominator) variance for January, 2020?
P6,750F
P8,250F
P6,750U
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