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The standard cost sheet for one of the Vitton Company's products is presented below.
*Rate based on expected activity of 12,000 hours
The following results for last year were recorded.

-The variable overhead efficiency variance is
A) $2,500 favourable.
B) $2,500 unfavourable.
C) $2,250 favourable.
D) $2,250 unfavourable.

Question

Use the following information to answer the next question(s):
The standard cost sheet for one of the Vitton Company's products is presented below.
  *Rate based on expected activity of 12,000 hours
The following results for last year were recorded.
 
-The variable overhead efficiency variance is
A) $2,500 favourable. 
B) $2,500 unfavourable. 
C) $2,250 favourable. 
D) $2,250 unfavourable.

Quizplus · Accepted Answer

The variable overhead efficiency variance is calculated as (Actual hours - Standard hours) x Standard variable overhead rate. If the actual hours are less than the standard hours, the variance is favorable.

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