Question

The following data have been provided by XYZ Corporation, a company that produces forklift trucks: Budgeted production 3,400 trucks Standard machine-hours per truck 2.9 machine-hours Standard supplies cost $ 1.50 per machine-hour Actual production 3,800 trucks Actual machine-hours 10,930 machine-hours Actual supplies cost (total) $ 17,496 Supplies cost is an element of variable manufacturing overhead. The variable overhead efficiency variance for supplies cost is:

Answer 1

Variable overhead efficiency variance= $135 favorable

Step-by-step explanation:

Giving the following information:

Standard supplies cost $ 1.50 per machine-hour

Standard machine-hours per truck 2.9 machine-hours

Actual production of 3,800 trucks

Actual machine-hours 10,930 machine-hours

To calculate the variable overhead efficiency variance, we need to use the following formula:

Variable overhead efficiency variance= (Standard Quantity - Actual Quantity)*Standard rate

Variable overhead efficiency variance= (2.9*3,800 - 10,930)*1.5

Variable overhead efficiency variance= (11,020 - 10,930)*1.5

Variable overhead efficiency variance= $135 favorable