Giguere Corporation applies manufacturing overhead to products on the basis of standard machine-hours.For the most recent month,the company based its budget on 2,000 machine-hours.Budgeted and actual overhead costs for the month appear below: The company actually worked 1,920 machine-hours during the month.The standard hours allowed for the actual output were 1,760 machine-hours for the month.What was the overall variable overhead efficiency variance for the month?
A)$832 unfavorable
B)$220 favorable
C)$1,888 unfavorable
D)$1,056 favorable

Question

Giguere Corporation applies manufacturing overhead to products on the basis of standard machine-hours.For the most recent month,the company based its budget on 2,000 machine-hours.Budgeted and actual overhead costs for the month appear below:  The company actually worked 1,920 machine-hours during the month.The standard hours allowed for the actual output were 1,760 machine-hours for the month.What was the overall variable overhead efficiency variance for the month?
A)$832 unfavorable 
B)$220 favorable 
C)$1,888 unfavorable 
D)$1,056 favorable

Quizplus · Accepted Answer

SR = ($6,800 + $16,800) F1F1F1S1F1F1F10 2,000 = $11.80
Variable overhead efficiency variance = SR (AH - SH)
= $11.80 (1,920 - 1,760) = $1,888 U

Giguere Corporation Applies Manufacturing Overhead to Products on the Basis