Asked by Mackenzie Thorne on Jun 11, 2024
Verified
The variable overhead efficiency variance for the month is closest to:
A) $268 U
B) $268 F
C) $276 F
D) $276 U
Variable Overhead Efficiency Variance
The difference between the budgeted and actual variable overhead costs, attributable to differences in the efficiency of utilizing resources.
- Calculate the differential in efficiency pertaining to variable overheads.
Verified Answer
CH
Chelsea HeardJun 12, 2024
Final Answer :
B
Explanation :
The formula for variable overhead efficiency variance is:
Actual Hours - (Actual Production x Standard Hours per Unit)
In this case, we have:
Actual Hours = 6,400
Actual Production = 800 units
Standard Hours per Unit = 8 hours per unit
So, the calculation would be:
6,400 - (800 x 8) = 4,800 unfavorable
Since the result is unfavorable, we need to use the F (favorable) option that is closest to the result. The closest option is $268 F, so the answer is B.
Actual Hours - (Actual Production x Standard Hours per Unit)
In this case, we have:
Actual Hours = 6,400
Actual Production = 800 units
Standard Hours per Unit = 8 hours per unit
So, the calculation would be:
6,400 - (800 x 8) = 4,800 unfavorable
Since the result is unfavorable, we need to use the F (favorable) option that is closest to the result. The closest option is $268 F, so the answer is B.
Explanation :
SH = 9,300 units × 0.20 hours per unit = 1,860 hours
Variable overhead efficiency variance = (AH × SR)- (SH × SR)
= (AH - SH)× SR
= (1,820 hours - 1,860 hours)× $6.70 per hour
= (-40 hours)× $6.70 per hour
= $268 F
Reference: CH09-Ref70
Juhasz Corporation makes a product with the following standards for direct labor and variable overhead: In August the company produced 7,900 units using 4,080 direct labor-hours.The actual variable overhead cost was $15,096.The company applies variable overhead on the basis of direct labor-hours.
Variable overhead efficiency variance = (AH × SR)- (SH × SR)
= (AH - SH)× SR
= (1,820 hours - 1,860 hours)× $6.70 per hour
= (-40 hours)× $6.70 per hour
= $268 F
Reference: CH09-Ref70
Juhasz Corporation makes a product with the following standards for direct labor and variable overhead: In August the company produced 7,900 units using 4,080 direct labor-hours.The actual variable overhead cost was $15,096.The company applies variable overhead on the basis of direct labor-hours.
Learning Objectives
- Calculate the differential in efficiency pertaining to variable overheads.
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