Question

he following standards for variable manufacturing overhead have been established for a company that makes only one product: Standard hours per unit of output 8.2 hours Standard variable overhead rate $14.60 per hour The following data pertain to operations for the last month: Actual hours 2,875 hours Actual total variable manufacturing overhead cost $42,715 Actual output 150 units What is the variable overhead efficiency variance for the month

Answer 1

See below

Step-by-step explanation:

Firstly, we will calculate the standard hour

Standard hours = (Standard hours per unit × Actual output

= 8.2 × 150

= 1,230

Variable overhead efficiency variance

= Standard rate × ( Actual hours - Standard hours)

= $14.6 × (2,875 - 1,230)

= $14.6 × 1,645

= $24,017 U