1. The data below relate to the month of November for Badong, Inc. which uses a standard cost system:

Actual direct labor cost $43,400 Actual hours used 14,000 Standard hours allowed for good output 15,000 Direct labor rate variance - debit 1,400 Actual total overhead 32,000 Budgeted fixed cost 9,000 Normal activity in hours 12,000 Total application rate per standard direct labor hour 2.25 Badong uses a two-way analysis of overhead variance.

a. What was Badong's budget (controllable) variance for November?

 

b. What was Badong's volume variance for November?

 

2. Casiu Company began its operations on January 1, 2021, and produces a single product that sells for $10.00 per unit. Casiu uses an actual (historical) cost system. In 2021, 100,000 units were produced and 80,000 units were sold. There was no work-in-process inventory at December 31, 2021. Manufacturing costs and selling and administrative expenses for 2021 were as follows:

	Fixed cost	Variable cost
Raw materials	-	P2.00 per unit
Direct labor	-	P1.25 per unit
Factory overhead	$120,000	P0.75 per unit
Selling & administrative	70,000	P1.00 per unit

a. What would be Casiu's operating income for 2021 under variable costing method?

 

b. What would be Casiu's operating income for 2021 under absorption costing method?

 

3. Wilms, Inc. uses a standard cost system. Overhead cost information for product A for the month of November is as follows:

 

What is the overall (or net) overhead variance?

 

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