A manufacturing company that has only one product has established the following standards for its variable manufacturing overhead.Variable manufacturing overhead standards are based on machine-hours. The following data pertain to operations for the last month: What is the variable overhead efficiency variance for the month?

Question

A manufacturing company that has only one product has established the following standards for its variable manufacturing overhead.Variable manufacturing overhead standards are based on machine-hours.  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 × 8.10 hours per unit = 1, 620 hours
Variable overhead efficiency variance = (AH - SH)× SR
= (1, 700 hours - 1, 620 hours)× $14.30 per hour
= (80 hours)× $14.30 per hour
= $1, 144 U

A Manufacturing Company That Has Only One Product Has Established