Reference no: EM132770563

Basti Company uses standard cost system and prepared the following budget at normal capacity for the month of January:

Direct Labor Hours 48,000
Variable Factory Overhead P96,000
Fixed factory Overhead P216,000
Total factory overhead per DLH P6.50

Actual data for January were as follows:

Direct labor hours worked 44,000
Total factory overhead P294,000
Standard DLH allowed for capacity attained 42,000

Problem 1: Using the two-way analysis of overhead variances, what is the budget (controllable) variance for January?

a. P6,000 favorable
b. P27,000 unfavorable
c. P18,000 favorable
d. 21,000 unfavorable