Dowen Corporation applies manufacturing overhead to products on the basis of standard machine-hours.For the most recent month,the company based its budget on 4,400 machine-hours.Budgeted and actual overhead costs for the month appear below: The company actually worked 4,460 machine-hours during the month.The standard hours allowed for the actual output were 4,310 machine-hours for the month.What was the overall variable overhead efficiency variance for the month?

Question

Dowen Corporation applies manufacturing overhead to products on the basis of standard machine-hours.For the most recent month,the company based its budget on 4,400 machine-hours.Budgeted and actual overhead costs for the month appear below:  The company actually worked 4,460 machine-hours during the month.The standard hours allowed for the actual output were 4,310 machine-hours for the month.What was the overall variable overhead efficiency variance for the month?

Quizplus · Accepted Answer

Variable overhead = $21,560 + $28,160 = $49,720
SR = $49,720 F1F1F1S1F1F1F10 4,400 hours = $11.30 per hour
Variable overhead efficiency variance = (AH - SH)SR
= (4,460 hours - 4,310 hours)$11.30 per hour
= (150 hours)$11.30 per hour = $1,695 U

Dowen Corporation Applies Manufacturing Overhead to Products on the Basis