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Reliance, Inc. utilizes a standard cost system for budget and control purposes. Flexible budgets are determined and all overhead cost items are assigned on

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Reliance, Inc. utilizes a standard cost system for budget and control purposes. Flexible budgets are determined and all overhead cost items are assigned on the basis of standard direct labor hours. The following standard cost per finished unit was determined on the basis of a projected monthly normal production for 2020: Direct materials (3 pounds @ P6.00) P18.00 Direct labor (0.30 hour @P40.00) 12.00 Variable overhead (0.30 hour @P10) Fixed overhead (.30 hour @ P6-2/3) Total 3.00 2.00 P35.00 You have just received the condensed performance report for the month of Sept., 2020. VARIANCE ANALYSIS Standard Costs Applied Price or Rate Variances Quantity or time or Capacity Efficiency Direct materials used P162,000 P14,000 F P6,000 U Direct labor costs 108,000 *18,200 U 1,200 U Variable overhead 27,000 5,250 U 300 U Fixed overhead 18,000 1,500 U P4,000** U *Includes labor joint variance. **Includes overhead capacity variance & fixed overhead efficiency variance

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