Strategic Cost The following information relates to a given department of Mervi Company for thefirst quarter of the year:Actual total overhead (fixed plus variable)P178,500Budget formula: Total FOH Cost = P110,000 + PO.50/hr%3DTotal overhead application rateP1.50 per hourSpending variance (from three-way analysis)P8,000 unfavorableVolume variance (from two-way analysis)P5,000 favorableEach unit takes 5 hours to manufacture and the selling price is P4.50 per unit. Basedon the overhead budget formula, how many units must be sold to generate P30,000more than total budgeted overhead costs?55,00027,50070,00035,000

Each unit takes 5 hours to manufacture and variable overhead cost per hour is P0.5 So, Variable…

Answered: on the overhead budget formula, how…

on the overhead budget formula, how many units must be sold to generate P30,000 more than total budgeted overhead costs?

Principles of Cost Accounting

17th Edition

ISBN:9781305087408

Author:Edward J. Vanderbeck, Maria R. Mitchell

Publisher:Edward J. Vanderbeck, Maria R. Mitchell

Chapter8: Standard Cost Accounting—materials, Labor, And Factory Overhead

Section: Chapter Questions

Problem 21E: Georgia Gasket Co. budgets 8,000 direct labor hours for the year. The total overhead budget is...

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Question

Strategic Cost

The following information relates to a given department of Mervi Company for the
first quarter of the year:
Actual total overhead (fixed plus variable)
P178,500
Budget formula: Total FOH Cost = P110,000 + PO.50/hr
%3D
Total overhead application rate
P1.50 per hour
Spending variance (from three-way analysis)
P8,000 unfavorable
Volume variance (from two-way analysis)
P5,000 favorable
Each unit takes 5 hours to manufacture and the selling price is P4.50 per unit. Based
on the overhead budget formula, how many units must be sold to generate P30,000
more than total budgeted overhead costs?
55,000
27,500
70,000
35,000

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