The following standards for variable overhead have been established for a company that makes only one product: Standard labor-hour per unit of output 8.5 hours Standard labor rate ₱15.00 per hour The following data pertain to operations concerning the product for the last month: Actual hours worked 8,000 hours Actual total labor cost ₱128,000 Actual output 1,000 units What is the variable overhead efficiency variance for the month? Show solution Group of answer choices ₱ 8,000 F ₱ 8,000 U ₱ 7,500 U ₱ 7,500 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.
10.
The following standards for variable
|
Standard labor-hour per unit of output |
8.5 hours |
|
Standard labor rate |
₱15.00 per hour |
The following data pertain to operations concerning the product for the last month:
|
Actual hours worked |
8,000 hours |
|
Actual total labor cost |
₱128,000 |
|
Actual output |
1,000 units |
What is the variable overhead efficiency variance for the month? Show solution
Group of answer choices
₱ 8,000 F
₱ 8,000 U
₱ 7,500 U
₱ 7,500 F
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