The following standards for variable manufacturing overhead have been established for a company that makes only one product: The following data pertain to operations for the last month: What is the variable overhead efficiency variance for the month?
A)$15,550 U
B)$15,200 U
C)$16,530 U
D)$980 F

Question

The following standards for variable manufacturing overhead have been established for a company that makes only one product:  The following data pertain to operations for the last month:  What is the variable overhead efficiency variance for the month?
A)$15,550 U 
B)$15,200 U 
C)$16,530 U 
D)$980 F

Quizplus · Accepted Answer

SH = 800 units × 3.5 hours per unit = 2,800 hours
Variable overhead efficiency variance = (AH - SH)× SR
= (3,800 hours - 2,800 hours)× $15.20 per hour
= (1,000 hours)× $15.20 per hour
= $15,200 U

The Following Standards for Variable Manufacturing Overhead Have Been Established