Question

A manufacturing company accumulates the following data on variable overhead: Actual cost incurred: $61,000; Actual allocation base times the standard variable rate: $64,000; Applied variable overhead: $60,000. The variable overhead efficiency variance is:

Answer 1

Answer: $4000U

Step-by-step explanation:

From the information given in the question, the variable overhead efficiency variance is the difference between the actual allocation base times the standard variable rate and the applied variable overhead. This will be:

= $64000 - $60000

= $4000U

Therefore, the variable overhead efficiency variance is $4000U