Reference no: EM132969779

Questions -

Q1) ABC Corporation conducted a regression analysis of its factory overhead costs. The analysis yielded the following cost relationship.

Total factory overhead cost = P 50,000 per month + 5H

Where: H - number of direct labor hours, the selected cost driver for overhead costs.

Each unit of product requires 6 direct labor hours. The company's normal production is 20,000 units of product per year.

The total overhead cost for a month's production of 2,000 units is:

a. P 60,000

b. P 50,000

c. P 110,000

d. P 0

Q2) Integrity Inc. applies overhead to production at a predetermined rate of 90% based on direct labor cost. Job No. 250, the only job still in process at the end of August, has been charged with manufacturing overhead of P7,200. What was the amount of direct materials charged to Job 250 assuming the balance in Work in Process inventory is P30,000?

a. P7,500

b. P8,000

c. P14,800

d. P30,000

Q3) Viy Company applies factory overhead using a percentage of direct labor cost.

Costs for the year 2020 have been estimated as follows:

Direct labor cost: 120,000

Factory overhead: 96,000

During January 2020, costs were recorded as follows:

Direct labor cost: 8,000

Factory overhead costs: 7,200

What is the amount of the factory overhead variance?

a. 2,800 unfavorable

b. 800 unfavorable

c. 800 favorable

d. 2,800 favorable