question archive Basti Company uses standard cost system and prepared the following budget at normal capacity for the month of January: Direct Labor Hours 48,000 Variable Factory Overhead P96,000 Fixed factory Overhead P216,000 Total factory overhead per DLH P6
Basti Company uses standard cost system and prepared the following budget at normal capacity for the month of January: Direct Labor Hours 48,000 Variable Factory Overhead P96,000 Fixed factory Overhead P216,000 Total factory overhead per DLH P6
Subject:AccountingPrice:2.86 Bought7
Basti Company uses standard cost system and prepared the following budget at normal capacity for the month of January:
Direct Labor Hours 48,000
Variable Factory Overhead P96,000
Fixed factory Overhead P216,000
Total factory overhead per DLH P6.50
Actual data for January were as follows:
Direct labor hours worked 44,000
Total factory overhead P294,000
Standard DLH allowed for capacity attained 42,000
Using the two-way analysis of overhead variances, what is the budget (controllable) variance for January?
a. P6,000 favorable
b. P27,000 unfavorable
c. P18,000 favorable
d. 21,000 unfavorable
Purchase A New Answer
Custom new solution created by our subject matter experts
GET A QUOTE
Answer Preview
d.
The budget (controllable) variance is calculated as, Actual Expense - Budgeted amount for the standard no. of units.
Standard Direct Labor Hours allowed for the capacity attained = 42000 hours
Total factory overhead per Direct Labor Hour = P 6.50/hour
Budgeted total factory overhead for the capacity attained = 42000 * 6.50
Actual total factory overhead = P 294,000
Please see the attached file for the complete solution
