The data below relates to the Month of April 2019 for Rachel Pinke, Inc.

, which uses a standard cost

system:

Actual total direct labor P43,400

Actual hours used 14,000
Standard hours allowed for good output 15,000
Direct labor rate variance-debit P 1,400 + 10z
Actual total overhead P 32,000
Budgeted fixed costs P 9,000
“Normal” activity in hours 12,000
Total overhead application rate per standard P 2.25 + 0.1z
direct-labor hour

1. How much is the direct labor rate variance?

2. How much is the direct labor efficiency variance?
3. How much is the direct labor total variance?
4. How much is the Overhead Budget variance?
5. How much is the Fixed Overhead volume variance?
6. How much is the total overhead variance?

7. Give the journal entries to record the variances, the additional of labor and overhead to work-in-
process and the closing of the variances to Cost of Goods Sold.

Note: Overhead Budget Variance = Variable OH rate variance + Variable OH efficiency variance + Fixed
OH spending variance.