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?

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?

Quizplus · Accepted Answer

SH = 200 units × 7.8 hours per unit = 1, 560 hours
Variable overhead efficiency variance = (AH - SH)× SR
= (2, 900 hours - 1, 560 hours)× $12.55 per hour
= (1, 340 hours)× $12.55 per hour
= $16, 817 U

The Following Standards for Variable Manufacturing Overhead Have Been Established