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:
-What was the variable overhead efficiency variance for the period to the nearest dollar?
A)$1,746 U
B)$70 U
C)$820 F
D)$74 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: 
-What was the variable overhead efficiency variance for the period to the nearest dollar?
A)$1,746 U 
B)$70 U 
C)$820 F 
D)$74 U

Quizplus · Accepted Answer

Variable overhead efficiency variance = (AH F1F1F1S1F1F1F10 SR)- (SH F1F1F1S1F1F1F10 SR)
= $32,550 - (6,984 MHs F1F1F1S1F1F1F10 $4.65 per MH)
= $32,550 - $32,476 = $74 U

A Manufacturing Company Uses a Standard Costing System in Which