(Appendix 10A) A manufacturing company has a standard costing system based on standard direct labor-hours (DLHs) as the measure of activity. Data from the company's flexible budget for manufacturing overhead are given below:
The following data pertain to operations for the most recent period:

-What was the variable overhead efficiency variance for the period to the nearest dollar?
A) $578 U
B) $385 U
C) $378 U
D) $955 U

Question

(Appendix 10A) A manufacturing company has a standard costing system based on standard direct labor-hours (DLHs) as the measure of activity. Data from the company's flexible budget for manufacturing overhead are given below:
  The following data pertain to operations for the most recent period:
 
-What was the variable overhead efficiency variance for the period to the nearest dollar?
A) $578 U 
B) $385 U 
C) $378 U 
D) $955 U

Quizplus · Accepted Answer

Variable overhead efficiency variance = (AH- SH) × SR
= (3,900 MHs - 3,850 MHs) × $7.70 per MH
= (50 MHs) × $7.70 per MH
= $385 U

(Appendix 10A) a Manufacturing Company Has a Standard Costing System