Question

Riverside Manufacturing designs and manufactures bathtubs for home and commercial applications. Riverside recorded the following data for its commercial bathtub production line during the month of​ March: Standard DL hours per tub 5 Standard variable overhead rate per DL hour $ 4.00 Standard variable overhead cost per unit $ 20.00 Actual variable overhead costs $ 18 comma 500 Actual DL hours 3 comma 700 Actual variable overhead cost per machine hour $ 5.00 Actual tubs produced 1 comma 200 What is the variable manufacturing overhead efficiency variance in​ March?

Answer 1

The variable manufacturing overhead efficiency variance is 9,000 Favorable.

Step-by-step explanation:

According to the given data we have the following:

actual DL hours=3,700

standard hours= Actual tubs produced×Standard DL hours per tub

standard hours=1,200×5=6,000

standard rate=$4

Therefore, to calculate the variable manufacturing overhead efficiency variance, we would have to use the following formula:

Variable efficiency variance= (actual hrs - standard hrs)*standard rate

Variable efficiency variance= (3,700 - 6,000)*4

Variable efficiency variance=-$9,000 Favorable