Mazzo Corporation makes a product with the following standards for direct labor and variable overhead: In February the company's budgeted production was 5,000 units, but the actual production was 5,100 units. The company used 2,090 direct labor-hours to produce this output. The actual variable overhead cost was $6,688. The company applies variable overhead on the basis of direct labor-hours.
-The variable overhead efficiency variance for February is:
A)$150 F
B)$160 F
C)$160 U
D)$150 U

Question

Mazzo Corporation makes a product with the following standards for direct labor and variable overhead:  In February the company's budgeted production was 5,000 units, but the actual production was 5,100 units. The company used 2,090 direct labor-hours to produce this output. The actual variable overhead cost was $6,688. The company applies variable overhead on the basis of direct labor-hours.
-The variable overhead efficiency variance for February is:
A)$150 F 
B)$160 F 
C)$160 U 
D)$150 U

Quizplus · Accepted Answer

SH = 5,100 units F1F1F1S1F1F1F10 0.4 hours = 2,040 hours
Variable overhead efficiency variance = (AH - SH)SR
= (2,090 hours - 2,040 hours)$3.00 per hour
= (50 hours)$3.00 per hour = $150 U

Mazzo Corporation Makes a Product with the Following Standards for Direct