Question

g Novelli Corporation makes a product whose variable overhead standards are based on direct labor-hours. The quantity standard is 1.4 hours per unit. The variable overhead rate standard is $11.00 per hour. In September, the company produced 1,450 units using 2,020 direct labor-hours. The actual variable overhead rate was $12.30 per hour. The variable overhead efficiency variance for September is:

Answer 1

Variable overhead efficiency variance= $110 favorable

Step-by-step explanation:

Giving the following information:

The quantity standard is 1.4 hours per unit.

The variable overhead rate standard is $11.00 per hour.

The company produced 1,450 units using 2,020 direct labor-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

standard quantity= 1.4*1,450= 2,030

Variable overhead efficiency variance= (2,030 - 2,020)*11

Variable overhead efficiency variance= $110 favorable