Underfoot Products uses standard costing.The following information about overhead was generated during May:
-Compute the variable overhead efficiency variance.
A)$10,000 (
B)$10,000 (
C)$40,000 (
D)$40,000 (

Question

Underfoot Products uses standard costing.The following information about overhead was generated during May:  
-Compute the variable overhead efficiency variance.
A)$10,000 (
B)$10,000 (
C)$40,000 (
D)$40,000 (

Quizplus · Accepted Answer

The variable overhead efficiency variance is calculated by comparing the actual hours worked to the standard hours allowed for the actual production, multiplied by the variable overhead rate per hour. If the actual hours are greater than the standard hours (indicating inefficiency), the variance is unfavorable (U). Without specific numbers for actual hours, standard hours, and the variable overhead rate, we cannot calculate the exact figure, but the choice indicating an unfavorable variance (U) suggests inefficiency, which is a common context for this type of variance.

Underfoot Products Uses Standard Costing