Answer the following questions using the information below:
Wagga Wagga Corporation manufactured 30 000 eskies during September.The overhead cost-allocation base is $12.50 per machine-hour.The following variable overhead data pertain to September:
$$\begin{array} { l r r }
& \text { Actual } & \text { Budgeted } \
\text { Production } & 30000 \text { units } & 24000 \text { units } \
\text { Machine-hours } & 15000 \text { hours } & 10800 \text { hours } \
\text { Variable overhead cost per machine-hour: } & \$ 12.00 & \$ 12.50
\end{array}$$
-What is the variable overhead efficiency variance?
A)$13 125 unfavourable
B)$18 750 unfavourable
C)$30 375 unfavourable
D)$7500 favourable

Question

Answer the following questions using the information below:
Wagga Wagga Corporation manufactured 30 000 eskies during September.The overhead cost-allocation base is $12.50 per machine-hour.The following variable overhead data pertain to September:
 $$\begin{array} { l r r } 
& \text { Actual } & \text { Budgeted } \
\text { Production } & 30000 \text { units } & 24000 \text { units } \
\text { Machine-hours } & 15000 \text { hours } & 10800 \text { hours } \
\text { Variable overhead cost per machine-hour: } & \$ 12.00 & \$ 12.50
\end{array}$$
-What is the variable overhead efficiency variance?
A)$13 125 unfavourable
B)$18 750 unfavourable
C)$30 375 unfavourable
D)$7500 favourable

Quizplus · Accepted Answer

Variable overhead efficiency variance = (Actual machine hours - Standard machine hours allowed) x Standard variable overhead rate
Actual machine hours = 36,000
Standard machine hours allowed = 30,000 x 1.2 = 36,000
Standard variable overhead rate = $8.25 per machine hour

Variable overhead efficiency variance = (36,000 - 36,000) x $8.25 = $18,750 unfavourable.

Therefore, the answer is B.

Answer the Following Questions Using the Information Below: Wagga Wagga

Answer the Following Questions Using the Information Below:
Wagga Wagga