The following standards for variable manufacturing overhead have been established for a company that makes only one product: The following data pertain to operations for the last month:
What is the variable overhead efficiency variance for the month?
A) $7,600 F
B) $2,835 F
C) $7,600 U
D) $7,425 U

Question

The following standards for variable manufacturing overhead have been established for a company that makes only one product:  The following data pertain to operations for the last month:
 What is the variable overhead efficiency variance for the month?
A) $7,600 F 
B) $2,835 F 
C) $7,600 U 
D) $7,425 U

Quizplus · Accepted Answer

SH = 1,000 units × 8.1 hours per unit = 8,100 hours
Variable overhead efficiency variance = (AH − SH) × SR
= (8,600 hours − 8,100 hours) × $14.85 per hour
= (500 hours) × $14.85 per hour
= $7,425 U

The Following Standards for Variable Manufacturing Overhead Have Been Established