A manufacturing company that has only one product has established the following standards for its variable manufacturing overhead. The company bases its variable manufacturing overhead standards on direct labor-hours.
The following data pertain to operations for the last month:

-The variable overhead efficiency variance for January is:
A) $320 F
B) $316 U
C) $320 U
D) $316 F

Question

A manufacturing company that has only one product has established the following standards for its variable manufacturing overhead. The company bases its variable manufacturing overhead standards on direct labor-hours.
  The following data pertain to operations for the last month:
 
-The variable overhead efficiency variance for January is:
A) $320 F 
B) $316 U 
C) $320 U 
D) $316 F

Quizplus · Accepted Answer

SH = 8,700 units × 0.1 hours per unit = 870 hours
Variable overhead efficiency variance = (AH - SH) × SR
= (910 hours − 870 hours) × $8.00 per hour
= (40 hours) × $8.00 per hour
= $320 U

A Manufacturing Company That Has Only One Product Has Established