12. A company manufactures a single product that requires a great deal of hand labor. Overhead cost is applied on the basis of direct labor hours. The company's condensed flexible budget for manufacturing

overhead is given below:

Overhead costs Variable costs

Fixed costs Total overhead costs

Cost Formula (per DL hour) P2.00

DIRECT LABOR HOURS

45,000 60,000 75,000 90,000 P120,000 P150,000

480,000 480,000 480,000 P570,000. P600,000 P630,000

The company's products requires 3 kilos of material that has a standard cost of P7 per kilo and 1.5 hours of direct labor time that has a standard rate of P6 per hour. The company planned to operate at a denominator

activity level of 60.000 direct labor hours and to produce 40,000 units of product during the most recent year.

Actual activity and costs for the year were as follows: Number of units produced

42,000

Actual direct labor hours worked Actual variable overhead cost incurred P123,500

65,000

483,000

Actual fixed overhead cost incurred REQUIRED:

A. VOH spending variance B. VOH Efficiency variance

C. FOH spending variance D. FOH volume variance