Machain Corporation applies manufacturing overhead to products on the basis of standard machine-hours. The company's standard variable manufacturing overhead rate is $2.90 per machine-hour. The actual variable manufacturing overhead cost for the month was $15,270. The original budget for the month was based on 5,000 machine-hours. The company actually worked 5,090 machine-hours during the month. The standard hours allowed for the actual output of the month totaled 5,200 machine-hours. What was the variable overhead efficiency variance for the month?
A)$580 Unfavorable
B)$190 Unfavorable
C)$509 Unfavorable
D)$319 Favorable

Question

Quizplus · Accepted Answer

The variable overhead efficiency variance is calculated as (Standard hours allowed - Actual hours worked) x Standard rate. Here, (5,200 - 5,090) x $2.90 = 110 x $2.90 = $319 Favorable.

Machain Corporation Applies Manufacturing Overhead to Products on the Basis