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Compute the variable overhead rate

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Question 1 - Hangin Inc. is engaged in manufacturing and selling portable electric fans. The company uses standards to control its costs. To finish one unit, 10 minutes is required. The budgeted variable manufacturing overhead rate is P12 per direct labor-hour. In the month of May, 1,920 hours of direct labor were actually used in producing 9,600 units. The amount of variable manufacturing overhead incurred is P21,120.

Required -

a. Compute the variable overhead rate and efficiency variances for the month.

b. What is the total variable overhead variance?

Question 2 - The budgeted company's variable manufacturing overhead is P20 per direct labor hour while its fixed manufacturing overhead budget amounts to P200,000 a month. The total budgeted direct labor hours is 15,000 needed to produce 75,000 units. For the month of May the actual operating results are:

Units produced 74,500

Actual direct labor hours 15,200

Actual manufacturing overhead (35% fixed) P620,000

Required -

a. Compute the predetermined overhead rate and separate fixed OH rate from variable overhead rate.

b. Determine the standard hours allowed for the actual production.

c. Compute the amount of overhead that will be applied to the actual output.

Reference no: EM132857550

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