The following standards for variable manufacturing overhead have been establishe

Question

The following standards for variable manufacturing overhead have been established for a company that makes only one product:

$11,945 U

$11,165 U

$780 F

$34,650 F

The following standards for variable manufacturing overhead have been established for a company that makes only one product:

  Standard hours per unit of output 9.0 hours   Standard variable overhead rate $15.40 per hour The following data pertain to operations for the last month:   Actual hours 2,975 hours   Actual total variable manufacturing overhead cost $46,595   Actual output 250 units

What is the variable overhead efficiency variance for the month?

$11,945 U

$11,165 U

$780 F

$34,650 F

Explanation / Answer

Variable OH Efficiency Variance= STD Rate(Actual Hours - Budgeted Hours)

VOHEV=15.40(2975 - 9*250)
=15.40(2975 -2250)
=11,165 U

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