Sperazza Corporation produces large commercial doors for warehouses and other fa
ID: 2598549 • Letter: S
Question
Sperazza Corporation produces large commercial doors for warehouses and other facilities. In the most recent month, the company budgeted production of 5,500 doors. Actual production was 5,900 doors. According to standards, each door requires 5.0 machine-hours. The actual machine-hours for the month were 30,210 machine-hours. The standard supplies cost is $1.50 per machine-hour. The actual supplies cost for the month was $41,690. Supplies cost is an element of variable manufacturing overhead. The variable overhead efficiency variance for supplies cost is:
Explanation / Answer
Variable overhead efficiency variance = 1.5*(30210-5900*5)= 1065 Unfavorable