The following data are available for Corp: Normal capacity is 50,000 units at 100,000 direct labor hours. Variable overhead rate is P 6 per unit and fixed overhead rate is P 8 per unit. Units produced totaled 38,000 units. Direct labor hours worked is 80,000 hours while the actual Fixed overhead totaled P 384,000 and actual variable overhead is P 250,000. Compute the variable spending variance.
Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
The following data are available for Corp: Normal capacity is 50,000 units at 100,000 direct labor hours. Variable overhead rate is P 6 per unit and fixed overhead rate is P 8 per unit. Units produced totaled 38,000 units. Direct labor hours worked is 80,000 hours while the actual Fixed overhead totaled P 384,000 and actual variable overhead is P 250,000. Compute the variable spending variance.
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