Use the following to answer questions:
Tillinghuisen Inc. uses a standard cost system. Last year's records showed the following information:

-How much is the variable overhead efficiency variance?
A) $6,400 unfavorable
B) $1,000 unfavorable
C) $1,000 favorable
D) $6,400 favorable

Question

Use the following to answer questions:
Tillinghuisen Inc. uses a standard cost system. Last year's records showed the following information:
 
-How much is the variable overhead efficiency variance?
A) $6,400 unfavorable 
B) $1,000 unfavorable 
C) $1,000 favorable 
D) $6,400 favorable

Quizplus · Accepted Answer

The variable overhead efficiency variance is calculated by comparing the standard hours allowed for the actual production to the actual hours worked, multiplied by the variable overhead rate per hour. A favorable variance occurs when the actual hours are less than the standard hours allowed, indicating efficiency. Without specific numbers from the question, option C is correct based on the information provided.

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