The following standards for variable overhead have been established for a company that makes only one product:Standard hours per unit of outputStandard variable overhead rateThe following data pertain to operations for the last month:Actual hours.Actual total variable overhead costActual output6.2 hours$13.50 per hour9,700 hours$ 125,1701,550 unitsRequired:a. What is the variable overhead rate variance for the month?b. What is the variable overhead efficiency variance for the month?(Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zerovariance). Input all amounts as positive values.)

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Description: The following standards for variable overhead have been established for a company that makes only one product:Standard hours per unit of outputStandard variable overhead rateThe following data pertain to operations for the last month:Actual hours.Ac

The term "variable overhead efficiency variance" refers to both the impact of the discrepancy…

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The following standards for variable overhead have been established for a company that makes only one product Standard hours per unit of output Standard variable overhead rate 6.2 hours $13.50 per hour The following data pertain to operations for the last month: Actual hours Actual total variable overhead cost Actual output 9,700 hours $ 125,170 1,550 units Required: a. What is the variable overhead rate variance for the month? b. What is the variable overhead efficiency variance for the month? (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.)

The following standards for variable overhead have been established for a company that makes only one product Standard hours per unit of output Standard variable overhead rate 6.2 hours $13.50 per hour The following data pertain to operations for the last month: Actual hours Actual total variable overhead cost Actual output 9,700 hours $ 125,170 1,550 units Required: a. What is the variable overhead rate variance for the month? b. What is the variable overhead efficiency variance for the month? (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.)

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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Concept explainers

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.

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Question

The following standards for variable overhead have been established for a company that makes only one product:
Standard hours per unit of output
Standard variable overhead rate
The following data pertain to operations for the last month:
Actual hours.
Actual total variable overhead cost
Actual output
6.2 hours
$13.50 per hour
9,700 hours
$ 125,170
1,550 units
Required:
a. What is the variable overhead rate variance for the month?
b. What is the variable overhead efficiency variance for the month?
(Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero
variance). Input all amounts as positive values.)

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