Question: Tulip Company uses a standard costing system. Information for the month of June is as follows: Actual overhead costs ($26,000 is fixed): $80,000 Direct labour: Actual hours worked - 12,000 hours Standard hours allowed for actual production - 10,000 hours Average actual labour cost per hour - $18 The overhead rate is based on a normal volume of 12,000 direct labour hours. Standard cost data at 12,000 direct labour hours were as follows: Variable overhead Fixed overhead $48,000 24,000 $72,000 Refer to Tulip Company. What is the variable overhead efficiency variance? Total overhead $2,000 U x $4,000 U $8,000 U $20,000 U

Principles of Accounting Volume 2
19th Edition
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax
Chapter8: Standard Costs And Variances
Section: Chapter Questions
Problem 8EA: Queen Industries uses a standard costing system in the manufacturing of its single product. It...
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Tulip Company uses a standard costing system. Information for the month of June is as follows:
Actual overhead costs ($26,000 is fixed): $80,000
Direct labour:
Actual hours worked - 12,000 hours
Standard hours allowed for actual production - 10,000 hours
Average actual labour cost per hour - $18
The overhead rate is based on a normal volume of 12,000 direct labour hours. Standard cost data at 12,000 direct labour hours
were as follows:
Variable overhead
Fixed overhead
$48,000
24,000
$72,000
Refer to Tulip Company. What is the variable overhead efficiency variance?
Total overhead
$2,000 U x
$4,000 U
$8,000 U
$20,000 U
Transcribed Image Text:Question: Tulip Company uses a standard costing system. Information for the month of June is as follows: Actual overhead costs ($26,000 is fixed): $80,000 Direct labour: Actual hours worked - 12,000 hours Standard hours allowed for actual production - 10,000 hours Average actual labour cost per hour - $18 The overhead rate is based on a normal volume of 12,000 direct labour hours. Standard cost data at 12,000 direct labour hours were as follows: Variable overhead Fixed overhead $48,000 24,000 $72,000 Refer to Tulip Company. What is the variable overhead efficiency variance? Total overhead $2,000 U x $4,000 U $8,000 U $20,000 U
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