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 = 3, 000 units × 1.6 hours per unit = 4, 800 hours
Variable overhead efficiency variance = (AH - SH)× SR
= (4, 900 hours - 4, 800 hours)× $11.55 per hour
= (100 hours)× $11.55 per hour
= $1, 155 U

The Following Standards for Variable Manufacturing Overhead Have Been Established