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Question: Marco Furniture Making Company uses the direct labor hours methodm for applying manufacturing overhead. The overhead application rate for 2008 is P8.60 per hour, based on anticipated fixed costs of P348,000 and anticipated variable costs of P684,000, with an expected volume of 120,000 labor hours. During the year, the company actually operated for 115,800 hours, incurring fixed overhead of P348,000 and variable overhead of P637,880.
What is the under or overapplied manufacturing overhead for the year?
What is the Total Variance?
What is the Fixed Volume Variance?
What is the spending variance?
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