Gigil Company has asked you to reconstruct their record after a fire. You were given the following variances: Favorable Spending variance, P400,000; Unfavorable varaible effieciency variance, P200,000; Favorable Volume variance P40,000. Total fixed overhead is P200,000 at normal capacity. The company's standard variable overhead is P40 per direct labor hour. In the given period, the company incurred a total overhead cost of P2,400,000. Compute for the standard factory overhead rate.
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.
Gigil Company has asked you to reconstruct their record after a fire. You were given the following variances: Favorable Spending variance, P400,000; Unfavorable varaible effieciency variance, P200,000; Favorable Volume variance P40,000. Total fixed
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