Question
Use the following for the next 3 items: Rainbow Company uses standard cost system for its production process. Rainbow Company applies overhead based on direct
Use the following for the next 3 items: Rainbow Company uses standard cost system for its production process. Rainbow Company applies overhead based on direct labor hours. The following information is available for October (SEE PICTURE BELOW):
1. What is the variable overhead spending variance?
a. P25 F
b. P7,975 U
c. P7,950 U
d. P10,590 U
2. Using the three-variance approach, what is the efficiency variance? (Refer to the Picture)
a. P 2,200 F
b. P 5,775 U
c. P 7,975 U
d. P11,770 F
3. Using the two-variance approach, what is the controllable variance? ( Refer to the picture
a. P 12,080 U
b. P 5,775 U
c. P 16,480 U
d. P 21,650 U
2.20 P 2.50 3.00 Standard: Direct labor hours per unit Variable overhead per hour Fixed overhead per hour (based on 11,990 DLHs) Actual: Units produced Direct labor hours Variable overhead Fixed overhead 4,400 8,800 P 29,950 42,300Step by Step Solution
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