The following data have been provided by Moretta Corporation, a company that produces forklift trucks: Supplies cost is an element of variable manufacturing overhead. The variable overhead efficiency variance for supplies cost is:
A) $135 U
B) $135 F
C) $966 U
D) $966 F

Question

The following data have been provided by Moretta Corporation, a company that produces forklift trucks:  Supplies cost is an element of variable manufacturing overhead. The variable overhead efficiency variance for supplies cost is:
A) $135 U 
B) $135 F 
C) $966 U 
D) $966 F

Quizplus · Accepted Answer

SH = 3,800 trucks × 2.9 hours per truck = 11,020 hours
Variable overhead efficiency variance = (AH − SH) × SR
= (10,930 hours − 11,020 hours) × $1.50 per hour
= (−90 hours) × $1.50 per hour
= $135 F

The Following Data Have Been Provided by Moretta Corporation, a Company