Answer the following question(s)using the information below.Willis Corporation manufactures industrial-sized gas furnaces and uses budgeted machine-hours to allocate variable manufacturing overhead.The following information pertains to the company's manufacturing overhead data:

-What is the variable overhead efficiency variance?
A)$8,600 favourable
B)$8,600 unfavourable
C)$141,900 favourable
D)$141,900 unfavourable
E)$11,000 unfavourable

Question

Answer the following question(s)using the information below.Willis Corporation manufactures industrial-sized gas furnaces and uses budgeted machine-hours to allocate variable manufacturing overhead.The following information pertains to the company's manufacturing overhead data:
 
-What is the variable overhead efficiency variance?
A)$8,600 favourable 
B)$8,600 unfavourable 
C)$141,900 favourable 
D)$141,900 unfavourable 
E)$11,000 unfavourable

Quizplus · Accepted Answer

The variable overhead efficiency variance is favourable when the actual variable overhead costs are less than the budgeted variable overhead costs. In this case, the actual variable overhead costs are $133,300 and the budgeted variable overhead costs are $141,900, so the variable overhead efficiency variance is $141,900 - $133,300 = $8,600 favourable.

Answer the Following Question(s)using the Information Below