Question

Bulluck Corporation makes a product with the following standard costs: Standard Quantity or Hours Standard Price...

Bulluck Corporation makes a product with the following standard costs:
Standard Quantity or Hours Standard Price or Rate
Direct materials 5.50 grams $ 3.00 per gram
Direct labor 0.60 hours $ 31.00 per hour
Variable overhead 0.60 hours $ 4.00 per hour
The company reported the following results concerning this product in July.
Actual output 5,000 units
Raw materials used in production 13,370 grams
Actual direct labor-hours 2,780 hours
Purchases of raw materials 14,100 grams
Actual price of raw materials purchased $ 3.20 per gram
Actual direct labor rate $ 13.40 per hour
Actual variable overhead rate $ 4.10 per hour
The company applies variable overhead on the basis of direct labor-hours. The direct materials purchases variance is computed when the materials are purchased.
The variable overhead efficiency variance for July is:

Homework Answers

Answer #1
  • Variable Overhead Efficiency Variance
    = $ 880 Favourable

Variable Overhead Efficiency Variance

(

Standard Hours = 5000 units x 0.60 hours

-

Actual Hours

)

x

Standard Rate

(

3000

-

2780

)

x

$                           4.00

880

Variance

$                  880.00

Favourable-F

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