Termeer Inc. has provided the following data concerning one of the products in i

Question

Termeer Inc. has provided the following data concerning one of the products in its standard cost system. Variable manufacturing overhead is applied to products on the basis of direct labor-hours.

The company has reported the following actual results for the product for August:

The variable overhead efficiency variance for the month is closest to:

$46 U

$42 F

$46 F

$42 U

Inputs Standard Quantity or Hours per Unit of Output Standard Price or Rate Variable manufacturing overhead 0.30 hours $2.30 per hour

Explanation / Answer

Variable overhead efficiency variance = (Standard hour-actual hour)Standard rate

= (8000*.30-2380)2.30

Variable overhead efficiency variance = 46 F

so answer is c) $46 F

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