Question

viger corporation has a standard cost system in which it applies manufacturing overhead to products on the basis of standard machine-hours (mhs). the company has provided the following data for the most recent month: budgeted level of activity 9,600 mhs actual level of activity 9,800 mhs standard variable manufacturing overhead rate $8.30 per mh actual total variable manufacturing overhead $78,570 what was the variable overhead effciency variance for the month? viger corporation has a standard cost system in which it applies manufacturing overhead to products on the basis of standard machine-hours (mhs). the company has provided the following data for the most recent month: budgeted level of activity 9,600 mhs actual level of activity 9,800 mhs standard variable manufacturing overhead rate $8.30 per mh actual total variable manufacturing overhead $78,570 what was the variable overhead effciency variance for the month? $1,660 f $1,660 u $2,770 f $2,770 u

Answer 1

The variable overhead efficiency variance for Viger Corporation is calculated by comparing the standard cost for actual activity with the actual cost incurred, resulting in a $2,770 favorable variance.

Step-by-step explanation:

The student is asking about the calculation of the variable overhead efficiency variance for Viger Corporation. Variable overhead efficiency variance is calculated as the difference between what the variable manufacturing overhead costs should have been for the actual level of activity and what those costs actually were. In this case, the actual total variable manufacturing overhead costs were $78,570 and the standard cost allocated would have been 9,800 MHs × $8.30 per MH, which equals $81,340. The variance is obtained by subtracting the actual cost from the standard cost ($81,340 - $78,570), which results in $2,770 favorable (F). This means that the company spent less on variable overhead than expected for the actual machine hours operated.