A manufacturing company uses a standard costing system in which standard machine-hours (MHs)is the measure of activity.Data from the company's flexible budget for manufacturing overhead are given below: The following data pertain to operations for the most recent period: The variable overhead efficiency variance for the period is closest to:
A)$300 F
B)$1,465 U
C)$1,760 U
D)$1,775 U

Question

A manufacturing company uses a standard costing system in which standard machine-hours (MHs)is the measure of activity.Data from the company's flexible budget for manufacturing overhead are given below:  The following data pertain to operations for the most recent period:  The variable overhead efficiency variance for the period is closest to:
A)$300 F 
B)$1,465 U 
C)$1,760 U 
D)$1,775 U

Quizplus · Accepted Answer

Variable overhead efficiency variance = (AH- SH)× SR
= (6,300 MHs - 5,994 MHs)× $5.75 per MH
= (306 MHs)× $5.75 per MH
= $1,759.50 U

A Manufacturing Company Uses a Standard Costing System in Which