Question: Sky Castle Manufacturing Company has a total underapplied overhead variance of P2,582.50. The budget variance had been P2,662.50 unfavorable. Efficiency variance, then, was P137.50 favorable.

Sky Castle Manufacturing Company has a total underapplied overhead variance of P2,582.50. The budget variance had been P2,662.50 unfavorable. Efficiency variance, then, was P137.50 favorable. Upon review of operations, it was ascertained that the actual variable overhead amounted to P46,000. The standard overhead rates are P55 per machine hour for variable overhead and P32 per machine hour for fixed overhead. Actual overhead machine hours, both for variable and fixed, is 800 machine hours.

How much was the entity’s actual fixed overhead?

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