Question

TB MC Qu. 10-48 The following standards for variable ...

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

Standard hours per unit of output		8.6	hours
Standard variable overhead rate	$	15.00	per hour

The following data pertain to operations for the last month:

Actual hours		2,925	hours
Actual total variable manufacturing overhead cost	$	44,635
Actual output		200	units

What is the variable overhead efficiency variance for the month?

Multiple Choice

• $18,835 U

• $18,075 U

• $760 U

• $25,800 F

Answer 1

Correct answer-------------$18,075 U

Working

Variable Overhead Efficiency Variance
(	Standard Hours	-	Actual Hours	)	x	Standard Rate
(	1720	-	2925	)	x	$           15.00
	$       (18,075.00)
	Variance		$             18,075.00			Unfavourable-U

.

Standard DATA for 200 units
	Quantity (SQ)
	[A]
Variable Overhead	( 8.6 Hour x 200 Units)=1720 Hour