The following standards for variable manufacturing overhead have been established for a company that makes only one product: Standard hours per unit of output - 3.2 hours Standard variable overhead rate - P12.70 per hour The following data pertain to operations for the last month: Actual hours - 1,600 hours Actual total variable overhead cost - P19,600 Actual output - 400 units What is the variable overhead spending variance for the month (F)?
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 following standards for variable manufacturing
Standard hours per unit of output - 3.2 hours
Standard variable overhead rate - P12.70 per hour
The following data pertain to operations for the last month:
Actual hours - 1,600 hours
Actual total variable overhead cost - P19,600
Actual output - 400 units
What is the variable overhead spending variance for the month (F)?
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