Use the following information to answer the following Questions
Kraig Fencing considers 4,000 direct labor hours or 100 fences to be its normal monthly capacity. Its standard variable overhead rate is $9 per direct labor hour. During the current month, $33,500 of variable overhead costs were incurred in working 3,800 direct labor hours to complete 92 fences.
-What is the variable overhead efficiency variance?
A) $1,080 U
B) $1,080 F
C) $1,800 U
D) $1,800 F
E) None of the above

Question

Use the following information to answer the following Questions 
 Kraig Fencing considers 4,000 direct labor hours or 100 fences to be its normal monthly capacity. Its standard variable overhead rate is $9 per direct labor hour. During the current month, $33,500 of variable overhead costs were incurred in working 3,800 direct labor hours to complete 92 fences.
-What is the variable overhead efficiency variance?
A) $1,080 U
B) $1,080 F
C) $1,800 U
D) $1,800 F
E) None of the above

Quizplus · Accepted Answer

SH per fence = 4,000/100 = 40 hrs. / fence
SH for this level of activity = 92 fences x 40 hrs. / fence = 3,680 hours
SR (AH-SH) = $9 x (3,800 - 3,680) = $1,080 U

Use the Following Information to Answer the Following Questions