Marten Corporation makes a product with the following standards for direct labor and variable overhead: In May the company produced 2,800 units using 300 direct labor-hours. The actual variable overhead cost was $1,620. The company applies variable overhead on the basis of direct labor-hours.
-The variable overhead efficiency variance for May is:
A)$100 U
B)$108 F
C)$108 U
D)$100 F

Question

Marten Corporation makes a product with the following standards for direct labor and variable overhead:  In May the company produced 2,800 units using 300 direct labor-hours. The actual variable overhead cost was $1,620. The company applies variable overhead on the basis of direct labor-hours.
-The variable overhead efficiency variance for May is:
A)$100 U 
B)$108 F 
C)$108 U 
D)$100 F

Quizplus · Accepted Answer

SH = 2,800 units F1F1F1S1F1F1F10 0.1 hours per unit = 280 hours
Variable overhead efficiency variance = (AH - SH)SR
= (300 hours - 280 hours)$5.00 per hour
= (20 hours)$5.00 per hour = $100 U

Marten Corporation Makes a Product with the Following Standards for Direct