The Maxit Corporation has a standard costing system in which variable manufacturing overhead is assigned to production on the basis of standard machine-hours. The following data are available for July:Actual variable manufacturing overhead cost incurred: $11,310Actual machine-hours worked: 1,600 hoursVariable overhead rate variance: $1,710 UnfavorableTotal variable overhead spending variance: $2,310 UnfavorableThe variable overhead efficiency variance for July is:
A) $600 Unfavorable
B) $540 Unfavorable
C) $540 Favorable
D) $600 Favorable

Question

Quizplus · Accepted Answer

The variable overhead efficiency variance can be found by subtracting the variable overhead rate variance from the total variable overhead spending variance. Given a total variable overhead spending variance of $2,310 Unfavorable and a variable overhead rate variance of $1,710 Unfavorable, the calculation is $2,310 - $1,710 = $600 Unfavorable.

The Maxit Corporation Has a Standard Costing System in Which