Burkett Company uses a standard cost system. Indirect costs were budgeted at $200,000 plus $15 per direct labour hour. The overhead rate is based on 10,000 hours. Actual results were: Standard direct labour hours 9,000
Actual direct labour hours 10,000
Fixed overhead $190,000
Variable overhead $185,000
The variable overhead efficiency variance was:
A)$10,000 F
B)$50,000 U
C)$35,000 U
D)$15,000 U

Question

Quizplus · Accepted Answer

Variable overhead efficiency variance = (Actual hours - Standard hours) x Standard variable overhead rate= (10,000 - 9,000) x $15= $15,000 U

Burkett Company Uses a Standard Cost System