The following information pertains to the Braun Company for March: Using the four-variance method of factory overhead variance analysis, what is the efficiency variance?

Question

The following information pertains to the Braun Company for March:  Using the four-variance method of factory overhead variance analysis, what is the efficiency variance?

Quizplus · Accepted Answer

Efficiency variance = (actual hours worked - standard hours allowed) x standard variable rate per hour
Efficiency variance = (10,500 - 11,000*) x $2
Efficiency variance = $1,000 Favorable (because actual hours worked were less than standard)
* Actual items produced x standard hours allowed (22,000 x .5 = 11,000)

The Following Information Pertains to the Braun Company for March