Reference no: EM132933692
Question - Orlando Corporation uses standard costing in its manufacturing operations. Overhead is applied based in direct labor hours. The following budget and actual data were provided for the month of September 2014:
Budgeted fixed overhead costs P 24,000
Budgeted variable overhead costs 48,000
Total budgeted factory overhead P 72,000
Fixed factory overhead rate P 4.80 per hour
Variable factory overhead rate 9.60 per hour
Overall factory overhead rate P 14.40 per hour
Normal capacity (direct labor hours) 5,000 hours
Standard labor time per unit of product 2 hours
Units produced during the period 2,000 units
Actual hours worked during the period 5,300 hours
Actual factory overhead incurred P61,000
Required -
a. Calculate the overall factory overhead variance?
b. Two-way analysis of factory overhead variances?
1. Controllable variance.
2. Volume variance.