The normal capacity of the Cutting Department is 12,000 machine hours per month. At normal capacity, the standard factory overhead rate is P12.50 per machine hour based on P96,000 budgeted fixed cost...

The normal capacity of the Cutting Department is 12,000 machine hours per month.  At normal capacity, the standard factory overhead rate is P12.50 per machine hour based on P96,000 budgeted fixed cost per month and a variable cost rate of P4.50 per machine hour.  During May, the department operated at 12,500 machine hours, with actual factory overhead of P166,000.  The number of standard machine hours allowed for the production actually attained is 11,000.


The controllable variance and volume variance, respectively, are