XYZ Company, which applies overhead on the basis of direct labor hours. Two direct labor hours are required for each product unit. Planned production for the period was set at 9,000 units. Manufacturing overhead is budgeted at P135,000 for the period, of which 20% of this cost is fixed. The 17,200 hours worked during the period resulted in production of 8,500 units. Variable manufacturing overhead cost incurred was P108,500 and fixed manufacturing overhead cost was P28,000. DEF Company uses a four variance method for analyzing manufacturing overhead. 7. The variable overhead spending variance for the period is A. P5,300 unfavorable C. P6,300 unfavorable B. P1,200 unfavorable D. P6,500 unfavorable 8. The variable overhead efficiency variance (quantity) variance for the period is A. P5,300 unfavorable C. P1,200 unfavorable B. P1,500 unfavorable D. P6,500 unfavorable 9. The fixed overhead budget (spending) variance for the period is A. P6,300 unfavorable C. P2,500 unfavorable B. P1,500 unfavorable D. P1,000 unfavorable
XYZ Company, which applies overhead on the basis of direct labor hours. Two direct labor hours are required for each product unit. Planned production for the period was set at 9,000 units. Manufacturing overhead is budgeted at P135,000 for the period, of which 20% of this cost is fixed. The 17,200 hours worked during the period resulted in production of 8,500 units. Variable manufacturing overhead cost incurred was P108,500 and fixed manufacturing overhead cost was P28,000. DEF Company uses a four variance method for analyzing manufacturing overhead. 7. The variable overhead spending variance for the period is A. P5,300 unfavorable C. P6,300 unfavorable B. P1,200 unfavorable D. P6,500 unfavorable 8. The variable overhead efficiency variance (quantity) variance for the period is A. P5,300 unfavorable C. P1,200 unfavorable B. P1,500 unfavorable D. P6,500 unfavorable 9. The fixed overhead budget (spending) variance for the period is A. P6,300 unfavorable C. P2,500 unfavorable B. P1,500 unfavorable D. P1,000 unfavorable
Chapter10: Short-term Decision Making
Section: Chapter Questions
Problem 7PB: Remarkable Enterprises requires four units of part A for every unit of Al that it produces....
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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.
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