Steep Enterprises machines heavy-duty brake rotors that are used on commercial airliners. Steep's management developed the following standard costs: Actual activity for October:
What is the variable manufacturing overhead efficiency variance in October?

Question

Steep Enterprises machines heavy-duty brake rotors that are used on commercial airliners. Steep's management developed the following standard costs:  Actual activity for October:
 What is the variable manufacturing overhead efficiency variance in October?

Quizplus · Accepted Answer

Variable manufacturing overhead efficiency variance = (Standard rate - Actual rate) x Actual activity
Standard rate = $11 per machine hour
Actual rate = ($142,000 ÷ 1,000) = $142 per machine hour
Actual activity = 10,000 machine hours
Variable manufacturing overhead efficiency variance = ($11 - $142) x 10,000 = $51,975 unfavorable.

Steep Enterprises Machines Heavy-Duty Brake Rotors That Are Used on Commercial