A corporation makes one specific product. The company budgeted production of 3,500 units for the month. It actually made 3,800 units. The standard is 4.6 machine hours (MH) per unit. 17,800 machine hours were used. $5.40 is the standard variable manufacturing overhead rate per MH. The variable manufacturing overhead cost was $96,712 for the month. What was the variable overhead efficiency variance? Multiple Choice $2,320 U $1,728 F $2,320 F $1,728 U
Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
A corporation makes one specific product. The company budgeted production of 3,500 units for the month. It actually made 3,800 units. The standard is 4.6 machine hours (MH) per unit. 17,800 machine hours were used. $5.40 is the standard variable manufacturing
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