The following standards for variable overhead have been established for a company that makes only one product: Standard hours per unit of output 7.2 hours Standard variable overhead rate $15 per hour The following data pertain to operations for the last month: Actual hours 10,500 hours 1,380 units Actual total variable overhead cost $157,500 Actual output Required: A. What is the variable overhead rate variance for the month? B. What is the variable overhead efficiency variance for the month?

The following standards for variable overhead have been established for a company that makes only one product: Standard hours per unit of output 7.2 hours Standard variable overhead rate $15 per hour The following data pertain to operations for the last month: Actual hours 10,500 hours 1,380 units Actual total variable overhead cost $157,500 Actual output Required: A. What is the variable overhead rate variance for the month? B. What is the variable overhead efficiency variance for the month?

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter9: Evaluating Variances From Standard Costs

Section: Chapter Questions

Problem 9DQ: At the end of the period, the factory overhead account has a credit balance of 10,000. (a) Is the...

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At the end of the period, the factory overhead account has a credit balance of 10,000. (a) Is the total factory cost variance favorable or unfavorable? (b) Are the controllable and volume variances favorable or unfavorable?
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