Asked by Tingting Cheung on May 21, 2024
Verified
The variable overhead efficiency variance is:
A) $1,645 F
B) $2,121 U
C) $2,121 F
D) $1,645 U
Variable Overhead Efficiency Variance
The difference between the actual variable overhead incurred during production and the standard cost of variable overhead allocated for the actual production volume.
- Compute and make clear the discrepancies in fixed and variable overhead costs, with a focus on budget, volume, and efficiency variances.
Verified Answer
RA
Rachida AugustineMay 23, 2024
Final Answer :
A
Explanation :
Variable component of the predetermined overhead rate (SR)= $28,200/12,000 labor-hours
= $2.35 per labor-hour
Variable overhead efficiency variance = (AH - SH)× SR
= (8,900 labor-hours - 9,600 labor-hours)× $2.35 per labor-hour
= (-700 labor-hours)× $2.35 per labor-hour
= $1,645 F
= $2.35 per labor-hour
Variable overhead efficiency variance = (AH - SH)× SR
= (8,900 labor-hours - 9,600 labor-hours)× $2.35 per labor-hour
= (-700 labor-hours)× $2.35 per labor-hour
= $1,645 F
Learning Objectives
- Compute and make clear the discrepancies in fixed and variable overhead costs, with a focus on budget, volume, and efficiency variances.