Balladares Incorporated has a standard cost system. Variable manufacturing overhead is applied to products on the basis of direct labor-hours. The standard for variable manufacturing overhead is 0.10 hours at $6.30 per hour. The company has reported the following actual results for the product for May:
Required:
a. Compute the variable overhead rate variance for May.
b. Compute the variable overhead efficiency variance for May.

a. Variable overhead rate variance = (Actual hours × Actual rate) − (Actual hours × Standard rate)
= $1,083 − (190 hours × $6.30 per hour)
= $1,083 − ($1,197)
= $114 Favorable
b. Standard hours = 2,000 units × 0.10 hours per unit = 200 hours
Variable overhead efficiency variance = (Actual hours × Standard rate) − (Standard hours × Standard rate)
= (Actual hours − Standard hours) × Standard rate
= (190 hours − 200 hours) × $6.30 per hour
= (−10 hours) × $6.30 per hour
= $63 Favorable