26. Your company has decided to allocate variable manufacturing overhead based on machine hours. Here is your company’s data and your company uses a standard costing system.
Budgeted output units 62,000 units
Budgeted machine-hours 38,750 hours
Budgeted variable manufacturing overhead costs for 38,750 hours $348,750
Actual output units produced 33,000 units
Actual machine-hours used 23,300 hours
Actual variable manufacturing overhead costs $384,000
What is the variable overhead rate variance and the variable overhead efficiency variance, rounded? Negative numbers denote a negative variance, positive numbers denote a positive variance.
a. $174,299, ($24,074)
b. $(174,299), ($24,074)
c. $(174,299), $24,074
d. None of the choices are correct.
e. $174,299, $24,074
Variable overhead efficiency variance
=Standard overhead rate x (Actual hours - Standard hours)
Note that standard hours are adjusted as to actual units.
Variable overhead rate variance
= Actual cost - ( Actual hours × Standard rate)
So e option
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