Homework Help is Here – Start Your Trial Now!
Business
Accounting
Peters operated at 80% of capacity during the year but applied factory overhead based on the 90% capacity level. Assuming that actual factory overhead was equal to the budgeted amount for the attained capacity, what is the amount of overhead variance for the year?

Peters operated at 80% of capacity during the year but applied factory overhead based on the 90% capacity level. Assuming that actual factory overhead was equal to the budgeted amount for the attained capacity, what is the amount of overhead variance for the year?

Principles of Cost Accounting
Principles of Cost Accounting
17th Edition
ISBN:9781305087408
Author:Edward J. Vanderbeck, Maria R. Mitchell
Publisher:Edward J. Vanderbeck, Maria R. Mitchell
Chapter8: Standard Cost Accounting—materials, Labor, And Factory Overhead
Section: Chapter Questions
Problem 20E: Calculating amount of factory overhead applied to work in process The overhead application rate for...
See similar textbooks
icon
Related questions
Question

PLEASE ANSWER AND PROVIDE SOLUTION

98. Peters Company uses a flexible budget system and prepared the following information for the year: Percent of capacity Direct labor hours 80% 90% Variable factory overhead Fixed factory overhead Total factory overhead rate per DLH 24,000 P48,000 P108,000 27,000 P54,000 P108.000 P7.00 P6.50 Peters operated at 80% of capacity during the year but applied factory overhead based on the 90% capacity level. Assuming that actual factory overhead was equal to the budgeted amount for the attained capacity, what is the amount of overhead variance for the year? a. P6,000 overabsorbed. b. P6,000 underabsorbed. C. P12,000 overabsorbed. d. P12,000 underabsorbed. (aicpа)
Transcribed Image Text:98. Peters Company uses a flexible budget system and prepared the following information for the year: Percent of capacity Direct labor hours 80% 90% Variable factory overhead Fixed factory overhead Total factory overhead rate per DLH 24,000 P48,000 P108,000 27,000 P54,000 P108.000 P7.00 P6.50 Peters operated at 80% of capacity during the year but applied factory overhead based on the 90% capacity level. Assuming that actual factory overhead was equal to the budgeted amount for the attained capacity, what is the amount of overhead variance for the year? a. P6,000 overabsorbed. b. P6,000 underabsorbed. C. P12,000 overabsorbed. d. P12,000 underabsorbed. (aicpа)
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 2 steps

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Knowledge Booster
Financial Information
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
Principles of Cost Accounting
Principles of Cost Accounting
Accounting
ISBN:
9781305087408
Author:
Edward J. Vanderbeck, Maria R. Mitchell
Publisher:
Cengage Learning
Financial And Managerial Accounting
Financial And Managerial Accounting
Accounting
ISBN:
9781337902663
Author:
WARREN, Carl S.
Publisher:
Cengage Learning,
Managerial Accounting
Managerial Accounting
Accounting
ISBN:
9781337912020
Author:
Carl Warren, Ph.d. Cma William B. Tayler
Publisher:
South-Western College Pub
Cornerstones of Cost Management (Cornerstones Ser…
Cornerstones of Cost Management (Cornerstones Ser…
Accounting
ISBN:
9781305970663
Author:
Don R. Hansen, Maryanne M. Mowen
Publisher:
Cengage Learning
Managerial Accounting: The Cornerstone of Busines…
Managerial Accounting: The Cornerstone of Busines…
Accounting
ISBN:
9781337115773
Author:
Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:
Cengage Learning
Principles of Accounting Volume 2
Principles of Accounting Volume 2
Accounting
ISBN:
9781947172609
Author:
OpenStax
Publisher:
OpenStax College
SEE MORE TEXTBOOKS