Luna Company calculates its predetermined rates using practical volume, which is 288,000 units. The standard costsystem allows 2 direct labor hours per unit produced. Overhead is applied using directlabor hours. The total budgeted overhead is P3,168,000, of which P864,000 is fixed overhead. The actual results for the year are as follows: Units produced: Direct labor hours 280,000 570,000 Direct labor rate P9 P2,320,000 P872,000 Variable overhead Fixed overhead Required: Determine the following: 1. Fixed OH volume variance 2. Variable OH spending variance 3. Variable OH efficiency variance 4. Fixed OH spending variance

Q: Greedy Co. uses a predetermined factory overhead rate based on direct labor hours. For the month of…

A: Overheads are the indirect costs related to production or manufacturing of goods. These costs can…

Q: Vin Diesel Company uses a standard costing system in which it applies manufacturing overhead to…

A: Total budgeted fixed factory overhead = Total applied factory overhead - Total Variable factory…

Q: The annual normal capacity for Saplot company is 36,000 machine hours, with fixed manufacturing…

A: Fixed overhead rate = budgeted fixed overhead /budgeted machine hours = 16920/36000 = $0.47 per hour

Q: XYZ Corporation uses a predetermined overhead application rate of P.30 per direct labor hour. During…

A: The predetermined overhead rate is calculated as estimated overhead cost divided by budgeted…

Q: Antuan Company set the following standard costs per unit for its product. $ 12.00 Direct materials…

A: When the actual price is higher than the standard price the price variance is unfavorable .…

Q: World Company expects to operate at 80% of its productive capacity of 50,000 units per month. At…

A: Overheads Volume Variance = Applied Fixed Overhead - Budgeted Fixed Overhead Overhead Controllable…

Q: DEF Company, which applies overhead on the basis of direct labor hours. Two direct labor hours are…

A: Variable cost is the cost which varies which the level of output. Fixed cost is the cost which…

Q: The annual normal capacity for Saplot company is 36,000 machine hours, with fixed manufacturing…

A: Overhead applied = (2,700 machine hours x P2.10 per hour) + P16,920 Overhead applied = P22,590

Q: Justine Company budgeted total variable overhead costs at P180,000 for the current period. In…

A: Formula: Applied overheads = Actual machine hours x Per hour rate

Q: Crawford Company's standard fixed overhead cost is $6.00 per direct labor hour based on budgeted…

A: Fixed  overhead costs do not change with the level of business activity during a period. These costs…

Q: The data below relate to the month of November for Badong, Inc. which uses a standard cost system:…

A: Formula: Fixed overhead rate = Budgeted fixed cost / Normal activity hours

Q: Vin Diesel Company uses a standard costing system in which it applies manufacturing overhead to…

A: Formula: Total budgeted fixed factory overhead = Total applied factory overhead - Total Variable…

Q: The data below relate to the month of November for Badong, Inc. which uses a standard cost system:…

A: Labor usage variance= Actual hours * Standard rate per hour - Actual hours * Actual rate per hou

Q: Compute the following variances. Indicate whether each is favorable or unfavorable, where…

A:

Q: The data below relate to the month of November for Badong, Inc. which uses a standard cost system:…

A: Controllable variance = Budgeted overhead (BO)- Actual overhead(AO)

Q: Acme Company's production budget for August is 19,100 units and includes the following component…

A: The variation between actual results and the budget or standard is referred as variance.

Q: The annual normal capacity for Saplot company is 36,000 machine hours, with fixed manufacturing…

A: fixed manufacturing overhead  RATE = BUDGETED fixed manufacturing overhead  / budgeted machine hours…

Q: Honesty Company prepared the following budgeted information for the coming year: Factory overhead…

A: Applied Overhead Rate = Estimated Overhead CostsEstimated Activity of Base Unit

Q: data below relate to the month of November for Badong, Inc. which uses a standard cost system:…

A: Fixed overhead rate = 9,000/12,000 = 0.75 per hour Variable overhead rate = 2.25 - 0.75 = 1.50 per…

Q: World Company expects to operate at 80% of its productive capacity of 50,000 units per month. At…

A:

Q: Oerstman, Inc., uses a standard costing system and develops its overhead rates from the current…

A: Variance is the difference between the actual and budgeted figures. These can be both Favorable (F)…

Q: Oerstman, Inc. uses a standard costing system and develops its overhead rates from the current…

A: 1. Compute fixed overhead spending variance: Fixed overhead spending variance = Actual fixed…

Q: Oerstman, Inc., uses a standard costing system and develops its overhead rates from the current…

A: Fixed overhead Spending variance = Budgeted Fixed overhead - Actual Fixed Overhead   Fixed overhead…

Q: During the year, 5,600 units were produced, 18,340 hours were worked, and the actual manufacturing…

A: Variable manufacturing overhead rate = Budgeted variable manufacturing overhead / Budgeted hours =…

Q: The following data pertains to the month of October for Elm. Co. when production was budgeted to be…

A: Variance:   The amount obtained when actual costs is deducted from budgeted cost is known as…

Q: The following data pertains to the month of October for Elm. Co. when production was budgeted to be…

A: Direct material quantity variance is calculated by taking the difference between actual quantity at…

Q: In October, Pine Company reports 20,600 actual direct labor hours, and it incurs $257,000 of…

A: overhead volume  variance  =  Standard hours  - normal hours) × fixed overhead  rate

Q: 6,000 units. During May, Cheshire produced 5,500 units. The budgeted fixed overhead is $60,000 and…

A: (3600 hours /6000 units )*5500 units = 3300  Direct labour  hours Budgeted Fixed overhead is $60,000…

Q: What was Badong’s volume variance for November? P2,250 unfavorable P500 favorable P500 unfavorable…

A: Fixed overhead rate = P9,000 / 12000 = P0.75 per labor hour

Q: The data below relate to the month of November for Badong, Inc. which uses a standard cost system:…

A: 1. Budgeted Fixed overhead rate = 9,000 / 12,000 = 0.75 2. Total Overhead Application  Rate = 2.25…

Q: World Company expects to operate at 80% of its productive capacity of 50,000 units per month. At…

A: Fixed overhead per labor hour=$50,00025,000=$2

Q: Zepol Company is planning to produce 600,000 power drills for the coming year. The company uses…

A: Overhead rates in the given case needs to be determined  based on budgeted direct labor hours.

Q: The following describes production activities of Mercer Manufacturing for the year.    Actual…

A: Step 1 The standard quantity of 15,030 is obtained by multiplying the actual units produced of…

Q: Langley Manufacturing Ltd. has budgeted fixed manufacturing overhead at $100,000 and per unit…

A: The question is based on the concept of Cost Accounting.

Q: Acme Company's production budget for August is 23,000 units and includes the following component…

A: The variance is the difference between the actual data and standard data.

Q: Antuan Company set the following standard costs per unit for its product. Direct materials (4.0…

A: Direct material cost variance: The direct material variance is the difference between the standard…

Q: Avery Company uses a predetermined overhead rate based on direct labor hours. For the month of…

A: Predetermined overhead rate = Budgeted overhead / Budgeted volume of direct labor hours = P300,000 /…

Q: The data below relate to the month of November for Badong, Inc. which uses a standard cost system:…

A: Labor rate variance = (standard rate - actual rate) * actual hours -1400 = (standard rate -…

Q: Vin Diesel Company uses a standard costing system in which it applies manufacturing overhead to…

A: Total budgeted fixed factory overhead = Total applied factory overhead - Total Variable factory…

Q: Oerstman, Inc., uses a standard costing system and develops its overhead rates from the current…

A: Actual overhead = $241,400 + $556,200 = $797600 Budgeted Fixed Overhead = Standard variable overhead…

Q: The following data pertains to the month of October for Elm. Co. when production was budgeted to be…

A: Direct material variances:   The difference between the actual material cost per unit and the…

Q: a standard cost system:             Actual direct labor cost, P43,400             Actual hours…

A: SOLUTION FIXED OVERHEAD RATE = BUDGETED FIXED COST / NORMAL ACTIVITY HOURS.

Q: Using the following information                 Actual direct labor hours used,…

A: Note: “Hi There, Thanks for posting the questions. As per our Q&A guidelines, must be answered…

Q: The data below relate to the month of November for Badong, Inc. which uses a standard cost system:…

A: Two-way analysis takes into account two variances: Overhead controllable variance and overhead…

Q: Zepol Company is planning to produce 600,000 power drills for the coming year. The company uses…

A: Overhead refers to the ongoing costs to operate a business but excludes the direct costs associated…

Q: The (partial) cost sheet for the single product manufactured at Vienna Company follows.…

A: a. Variable overhead efficiency variance 1. Actual hours Variable overhead price variance = (Actual…

Q: The data below relate to the month of November for Badong, Inc. which uses a standard cost system:…

A: Labor rate variance = (standard rate - actual rate) * actual hours   -1400 = (standard rate -…

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.