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. 10. The fixed overhead volume (denominator) variance for the period is C. P2,500 unfavorable A. P 750 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. 10. The fixed overhead volume (denominator) variance for the period is C. P2,500 unfavorable A. P 750 unfavorable B. P1,500 unfavorable D. P1,000 unfavorable
Managerial Accounting: The Cornerstone of Business Decision-Making
7th Edition
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Chapter10: Standard Costing And Variance Analysis
Section: Chapter Questions
Problem 72P: Moleno Company produces a single product and uses a standard cost system. The normal production...
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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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Transcribed Image Text: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.
10. The fixed overhead volume (denominator) variance for the period is
A. P 750 unfavorable C. P2,500 unfavorable
B. P1,500 unfavorable
D. P1,000 unfavorable
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