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Cole laboratories make and sell a lawn fertilizer called Fastgro. The company has developed standard costs for one bag of Fastgro as follows: Standard Standard

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Cole laboratories make and sell a lawn fertilizer called Fastgro. The company has developed standard costs for one bag of Fastgro as follows: Standard Standard Standard Cost Quantity/Hours Price/Rate per Bag Direct Material 20 pounds P 0.40 P 8.00 Direct Labor 0,1 hour P11.00 P 1.10 Variable 0,1 hour P 4.00 P 0.40 Overhead The company had no beginning inventories of any kind on Jan. 1. Variable overhead is applied to production on the basis of standard direct labor-hours. During January, the following activity was recorded by the company: . Production of Fastgro: 4,000 bags . Direct materials purchased: 85,000 pounds at a cost of P32,300 . Inventory of direct materials on Jan. 31: 3,000 pounds . Direct labor worked: 390 hours at a cost of P4,875 . Variable overhead incurred: P1,475 The materials flexible budget variance amounts to P Indicate in your solution sheet whether it is FAVORABLE or UNFAVORABLE

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