Information Part 3 as the following variable manufacturing overhead standard to
ID: 2397393 • Letter: I
Question
Information Part 3 as the following variable manufacturing overhead standard to manufacture one Zippy 1.5 standard hours per Zippy at $3.00 per direct labor hour Last week, 1,550 hours were worked to make 1 manufacturing overhead. ,000 Zippies, and $5,115 was spent for variable Hanson's rate variance (VMRV) for variable manufacturi ng overhead for the week was: . a. $465 unfavorable b. $400 favorable c. $335 unfavorable d. $300 favorable Hanson's efficiency variance (VMEV) for variable manufacturing overhead for the week was: a. $435 unfavorable b. $435 favorable c. $150 unfavorable d. $150 favorableExplanation / Answer
(a) Hanson’s Rate Variance for Variable manufacturing Overhead
Rate Variance = [AH x AR] – [AH x SR]
= $5,115 – [1,550 Hours x $3.00]
= $5,115 - $4,650
= $465 Unfavorable
(b) Hanson’s Efficiency Variance for Variable manufacturing Overhead
Efficiency Variance = [AH x SR] – [SH x SR]
= [1,550 Hours x $3.00] – [1,500 Hours x $3.00]
= $4,650 – 4,500
= $150 Unfavorable
*SH = 1,000 Zippies x 1.5 Hours per Zippy = 1,500 Hours