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)$3,192 U
B)$6,913 F
C)$7,161 U
D)$6,913 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)$3,192 U 
B)$6,913 F 
C)$7,161 U 
D)$6,913 U

Quizplus · Accepted Answer

SH = 1,900 units F1F1F1S1F1F1F10 4.2 hours per unit = 7,980 hours
Variable overhead efficiency variance = (AH - SH)SR
= (8,600 hours - 7,980 hours)$11.55 per hour
= (620 hours)$11.55 per hour = $7,161 U

The Following Standards for Variable Manufacturing Overhead Have Been Established