Asked by Frasier Williamson on Jun 11, 2024
Verified
The variable overhead efficiency variance for the month is closest to:
A) $2,450 F
B) $2,400 U
C) $2,400 F
D) $2,450 U
Variable Overhead Efficiency Variance
This is the difference between the expected (standard) cost of variable overheads based on actual production outputs and the actual variable overhead costs incurred.
- Acquire knowledge on determining variable overhead efficiency variance.
- Understand the criteria that separate favorable (F) and unfavorable (U) variances.
Verified Answer
SS
Sunil SunkariJun 11, 2024
Final Answer :
C
Explanation :
SH = 8,500 units × 0.30 hours per unit = 2,550 hours
Variable overhead efficiency variance = (AH × SR)- (SH × SR)
= (AH - SH)× SR
= (2,300 hours - 2,550 hours)× $9.60 per hour
= (-250 hours)× $9.60 per hour
= $2,400 F
Reference: CH09-Ref46
Dirickson Inc.has provided the following data concerning one of the products in its standard cost system.Variable manufacturing overhead is applied to products on the basis of direct labor-hours.
The company has reported the following actual results for the product for July: 
Variable overhead efficiency variance = (AH × SR)- (SH × SR)
= (AH - SH)× SR
= (2,300 hours - 2,550 hours)× $9.60 per hour
= (-250 hours)× $9.60 per hour
= $2,400 F
Reference: CH09-Ref46
Dirickson Inc.has provided the following data concerning one of the products in its standard cost system.Variable manufacturing overhead is applied to products on the basis of direct labor-hours.
The company has reported the following actual results for the product for July: 
Learning Objectives
- Acquire knowledge on determining variable overhead efficiency variance.
- Understand the criteria that separate favorable (F) and unfavorable (U) variances.