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Variance Analysis

Variance Analysis

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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Topic: Variance Analysis

PROBLEM#6 The standard overhead cost for a product manufactured by SCOMAN1 Corporation is given below: PER UNIT Variable overhead 3hrs@P10/hr P 30 Fixed overhead 15 3hrs@P5/hr Total Standard overhead rate P 45 The company produced 40,000 units and worked 110,000 actual direct labor hours. Overhead is applied to production on the basis of direct labor hours. The company's normal capacity is 50,000 units or 150,000 hours (i.e.,50,000 units x 3 hrs). Actual variable overhead is P987,500 and actual fixed overhead is P1,500,000. COMPUTE for the following: 19. Controllable variance 20. Volume variance 21. Spending variance 22. Fixed spending variance 23. Efficiency variance 24. Spending variance 25. Total Overhead Variance.
Transcribed Image Text:PROBLEM#6 The standard overhead cost for a product manufactured by SCOMAN1 Corporation is given below: PER UNIT Variable overhead 3hrs@P10/hr P 30 Fixed overhead 15 3hrs@P5/hr Total Standard overhead rate P 45 The company produced 40,000 units and worked 110,000 actual direct labor hours. Overhead is applied to production on the basis of direct labor hours. The company's normal capacity is 50,000 units or 150,000 hours (i.e.,50,000 units x 3 hrs). Actual variable overhead is P987,500 and actual fixed overhead is P1,500,000. COMPUTE for the following: 19. Controllable variance 20. Volume variance 21. Spending variance 22. Fixed spending variance 23. Efficiency variance 24. Spending variance 25. Total Overhead Variance.
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