Question

# 26. Your company has decided to allocate variable manufacturing overhead based on machine hours. Here is...

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.

Select one:

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

=Standard overhead rate x (Actual hours - Standard hours)

= (348,750/38,750)×(23,300-(38,750/62,000*33,000))

= \$24,075

Note that standard hours are adjusted as to actual units.

= Actual cost - ( Actual hours × Standard rate)

= 384,000-(23,300*(348,750/38,750))

= \$174,300

So e option

Hope this makes contribution to your success. Hit Like to motivates the experts to provide quality solutions.

Any feedback will also be appreciated.

Best of luck?!

#### Earn Coins

Coins can be redeemed for fabulous gifts.