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Delvig [45]
3 years ago
11

Brummer Corporation makes a product whose variable overhead standards are based on direct labor-hours. The quantity standard is

0.1 hours per unit. The variable overhead rate standard is $8.00 per hour. In January the company produced 8,700 units using 910 direct labor-hours. The actual variable overhead rate was $7.90 per hour. The variable overhead efficiency variance for January is:________
a. $320 F
b. $316 U
c. $320 U
d. $316 F
Business
1 answer:
Sonja [21]3 years ago
8 0

Answer:

c) Variable overhead efficiency variance =  $320 Unfavorable

Explanation:

<em>The variable overhead efficiency variance</em><em> is the difference between the </em><em>actual hours</em><em> and the </em><em>standard hours for the actual output</em><em> valued at the standard variable overhead rate per hour.</em>

                                                                                      Hours

8700 units should have taken (8700× 0.1)                   870

but took                                                                           <u>910</u>

                                                                                         40   Unfavorable

× Standard rate per hour                                       ×        <u>$8</u>

Variable overhead efficiency variance                      <u>$320</u> Unfavorable

Variable overhead efficiency variance =  $320 Unfavorable

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