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) $15,550 Unfavorable
B) $15,200 Unfavorable
C) $16,530 Unfavorable
D) $980 Favorable

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) $15,550 Unfavorable 
B) $15,200 Unfavorable 
C) $16,530 Unfavorable 
D) $980 Favorable

Quizplus · Accepted Answer

Variable Overhead Efficiency Variance = (Standard Hours - Actual Hours) x Variable Overhead Rate 
Standard Hours = 35,000 (based on the standard rate of 10 hours per unit for 3,500 units) 
Actual Hours = 37,000 
Variable Overhead Rate = $4.00 
Variance = (35,000 - 37,000) x $4.00 = $15,200 unfavorable.

The Following Standards for Variable Manufacturing Overhead Have Been Established