How much is the expected capacity variance

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Question - EF Corporation is preparing its factory overhead cost budget for the third quarter of 200B. The management plans to produce 200,000 units for the said quarter. Past experience has shown that the company's product is produced at the rate of 4 units per hour. Variable rates per direct labor hour as follows:

Indirect materials and supplies P0.76

Power 1.36

Repairs and maintenance 2.8

Other variable overhead 0.96

Total P5.88

Total fixed overhead cost is budgeted at P147,200. For product costing purposes, a fixed overhead rate of P3.20 per direct labor hour has been established. How much is the expected capacity variance?

Reference no: EM132811014

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