23. The following standards for variable manufacturing overhead have been establ

Question

23. The following standards for variable manufacturing overhead have been established for a company tha makes only one product: Standard hours per unit of output 3.5 hours Standard variable overhead rate The following data pertain to operations for the last month: Actual hours $ 15.20 per hour 3,800 hours Actual total variable manufacturing overhead cost 59,090 800 units Actual output What is the variable overhead efficiency variance for the month? a. $15,550 U b. $15,200 U c. $16,530 U d. $980 F

Explanation / Answer

Variable overhead efficiency variance = (Standard hours - Actual hours ) X Standard rate
= {(800 x 3.5) - 3,800) x $15.20
= (2,800 - 3,800) x $15.20
= $15,200 U

Option b. $15,200 U is correct answer.

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