55.

(d)

(1) This variance equais the standard rate per unit of the activity measure (direct labor hours) times the
difference between the actual activity and the standard activity for the actual output.

Less: Standard hours (3 hrs./unit x 1,500 units). 4,700

Actual hours. 4,500

Difference in hours 200

Multiplied by: Varable Overhead Rate. P

2

Variable Overhead Efficiency-Unfavorable

P 400(d)

This variance is unfavorable because actual hours exceeded the standard hours allowed for actual
output.

(2) This variance equals the difference between the actual varable overhead incured and the standard
cost based on the actual activity level.

Actual Variable Overhead....

Less: Budgeted Variable Overhead based on P9,500

actual hours (4,700):

P2x4,700.
9,400

Variable Overhead Spending Variance - unfavorable .

P 100(d)

56. (b)

(1) The variable overhead spending variance is a price variance. It is the difference between actual
variable overhead costs (actual activity times the actual ratel and actual activity times the standard rate.

Actual Variable Overhead.. P108,500

Less: Budgeted Variable Overhead based on actual hours (17,200 hours):P6*x17,200

103,200

Variable Overhead Spending Variance - Unf. P 5,300(b)

*(P135,000 x 80%) + (2 hrs./unit x 9,000 units) =P6.

(2) The variable overhead efficiency (quantity) variance is the standard variable overhead rate times
the difference between the actual activity and the standard activity allowed for the actual output.

Actual hours. 17,200

Less: Standard hours: (2 hr./units x actual 17,000

production of 8,500 units) ..

Difference in hours .

Multiplied by: Variable Overhead Rate.

Variable Overhead Efficiency Variance-Unf.

200

P 6

P 1,200(b)

57. (a) (1)

The fixed overhead budget spending variance is the difference between actual fixed costs and budgeted
fixed costs.

Actual fixed overhead.. P28,000

Less: Budgeted fixed overhead based on actual hours

(20% x P135,000). 27,000

Fixed overhead budget (spending) variance - unf. ....................

P 1,000 (a)

1238

Chapter 18