Month of JULY

Actual Cost Standard Cost Standard overhead rate per hour = total standard factory overhead cost/standard direct labor hrs
Factory Overhead 1665.46/412 = Php 4.04
Fixed (acquisition cost/lifespan)
Depreciation of deep fryer 410.56 410.56 Standard overhead costs applied to WIP = actual units produced x standard labor hrs per unit x standard overhead rate per hr
Depreciation of gas stove 3.85 3.85 566*0.7273*4.04 = 1,663.07
Total Fixed FOH 414.41
Variable factory overhead cost per unit = total variable FOH / standard direct labor hours
Variable 1251.05/412 = 3.04
Paper bag 163.80 163.80
Oil 935.00 935.00 Factory Overhead
Burger wrapper 110.00 110.00 1665.46 1663.07
Tissue 42.25 42.25
Total Variable FOH 1251.05 2.39 (Underapplied)
TOTAL 1665.46 1665.46

Standard factory overhead budgeted for actual level of production

Variable Cost:
566 units*0.7273*3.04 1251.42
Fixed cost: 414.41
Flexible budget at actual production level 1665.83
Actual factory overhead incurred 1665.46
Flexible budget variance 0.37 Favorable

Flexible budget at actual production lev 1665.83

Factory overhead applied:
566*0.7273*Php 4.04 1663.07
Assumptions: Production-volume variance 2.75999999999999 Unfavorable
The actual costs of deep fryer and gas stove are assumed to be the standard fixed costs
The life span of deep fryer is 9 months Flexible budget at actual production level 0.37
The life span of gas stove is assumed to be 13 years or 156 months Production-budget variance (unfavorable) 2.76
The actual factory overhead costs for variable items are assumed to be the standard factory overhead costs Underapplied Factory Overhead -2.39
 Month of AUGUST Standard overhead rate per hour = total standard factory overhead cost/standard direct labor hrs
Actual Cost Standard Cost 539.91/388 = Php 1.39
Factory Overhead
Fixed (acquisition cost/lifespan) Standard overhead costs applied to WIP = actual units produced x standard labor hrs per unit x standard overhead rate per hr
Depreciation of deep fryer 410.56 410.56 196*0.6857*1.39 = 186.81
Depreciation of gas stove 3.85 3.85
Total Fixed FOH 414.41 414.41 Variable factory overhead cost per unit = total variable FOH / standard direct labor hours
125.50/388 = 0.32
Variable
Paper bag - - Factory Overhead
Oil - - 493.91 186.81
Burger wrapper 64.00 110.00
Tissue - - 307.1 (Underapplied)
Straw 15.50 15.50
Total Variable FOH 79.50 125.50
TOTAL 493.91 539.91

Standard factory overhead budgeted for actual level of production Flexible budget at actual production level 457.42
Variable Cost: Factory overhead applied:
196 units*0.6857*0.32 43.01 196*0.6857*Php 1.39 186.81
Fixed cost: 414.41 Production-volume variance 270.61 Favorable
Flexible budget at actual production 457.42
Actual factory overhead incurred 493.91
Flexible budget variance -36.49 Unfavorable
Flexible-budget variance (favorable) 414.41
Production-budget variance (unfavorable) 270.61
Underapplied Factory Overhead 143.80
Assumptions:
The actual costs of deep fryer and gas stove are assumed to be the standard fixed costs
The life span of deep fryer is 9 months
The life span of gas stove is assumed to be 13 years or 156 months
The actual factory overhead costs for variable items are assumed to be the standard factory overhead costs
 Month of SEPTEMBER Standard overhead rate per hour = total standard factory overhead cost/standard direct labor hrs
Actual Cost Standard Cost 493.91/168 = Php 2.61
Factory Overhead
Fixed (acquisition cost/lifespan) Standard overhead costs applied to WIP = actual units produced x standard labor hrs per unit x standard overhead rate per hr
Depreciation of deep fryer 410.56 410.56 168*0.6486*2.619 = 284.40
Depreciation of gas stove 3.85 3.85
Total Fixed FOH 414.41 414.41 Variable factory overhead cost per unit = total variable FOH / standard direct labor hours
79.50/168 = 0.47
Variable
Paper bag - - Factory Overhead
Oil 885.00 - 1396.06 284.4
Burger wrapper - 64.00
Tissue 64.00 - 1111.66 (Underapplied)
Tide 9.25
Pride 23.40 -
Straw - 15.50
Total Variable FOH 981.65 79.50 Flexible budget at actual production level 465.62
TOTAL 1396.06 493.91 Factory overhead applied:
168*0.6486*Php 2.61 284.4
Production-volume variance 181.22 Favorable
Standard factory overhead budgeted for actual level of production
Variable Cost: Flexible-budget variance (favorable) -930.44
168 units*0.6486*0.47 51.21 Production-budget variance (unfavorable) 181.22
Fixed cost: 414.41 Underapplied Factory Overhead -1111.66
Flexible budget at actual production level 465.62
Actual factory overhead incurred 1396.06
Flexible budget variance -930.44 Unfavorable

Assumptions:
The actual costs of deep fryer and gas stove are assumed to be the standard fixed costs
The life span of deep fryer is 9 months
The life span of gas stove is assumed to be 13 years or 156 months
The actual factory overhead costs for variable items are assumed to be the standard factory overhead costs

Assumptions:
the actual costs of deep fryer and gas stove are assumed to be the standard fixed costs
the life span of deep fryer is 9 months
the life span of gas stove is assumed to be 13 years or 156 months
the actual factory overhead costs for variable items are assumed to be the standard factory overhead costs