Juhasz Corporation makes a product with the following standards for direct labor and variable overhead:
In August the company produced 7,900 units using 4,080 direct labor-hours. The actual variable overhead cost was $15,096. The company applies variable overhead on the basis of direct labor-hours.
-The variable overhead efficiency variance for August is:
A) $520 U
B) $481 U
C) $481 F
D) $520 F

Question

Juhasz Corporation makes a product with the following standards for direct labor and variable overhead:
  In August the company produced 7,900 units using 4,080 direct labor-hours. The actual variable overhead cost was $15,096. The company applies variable overhead on the basis of direct labor-hours.
-The variable overhead efficiency variance for August is:
A) $520 U 
B) $481 U 
C) $481 F 
D) $520 F

Quizplus · Accepted Answer

SH = 7,900 units × 0.5 hours per unit = 3,950 hours
Variable overhead efficiency variance = (AH - SH) × SR
= (4,080 hours − 3,950 hours) × $4.00 per hour
= (130 hours) × $4.00 per hour
= $520 U

Juhasz Corporation Makes a Product with the Following Standards for Direct