Answer:
Variable overhead efficiency variance = $798.36 unfavorable
Explanation:
<em>Variable overhead efficiency variance is the difference between the actual time taken to achieve a given production output less the standard hours for same multiplied by the standard variable overhead rate</em>
Since the variable overhead is charged using machine hours, any amount by which the actual labour hours differ from the standard allowable hours would result in a variance
<em>Overhead absorption rate =Estimated overhead/estimated machine hours</em>
105,300/5,500 machine hours = $19.14 per machine hour
$
5,580 hours should have cost (5,580× 19.14) 106,831.6
but did cost (actual cost ) <u> 107,630 </u>
Variable overhead efficiency variance. <u>798.36 </u>unfavorable
<em>Variable overhead efficiency variance = $798.36 unfavorable</em>