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)$9,219 U
B)$10,179 U
C)$9,867 U
D)$648 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)$9,219 U 
B)$10,179 U 
C)$9,867 U 
D)$648 U

Quizplus · Accepted Answer

SH = 600 units F1F1F1S1F1F1F10 2.7 hours per unit = 1,620 hours
Variable overhead efficiency variance = (AH - SH)SR
= (2,400 hours - 1,620 hours)$13.05 per hour
= (780 hours)$13.05 per hour = $10,179 U

The Following Standards for Variable Manufacturing Overhead Have Been Established