Calhoun Company has a direct labor standard of 15 hours per unit of output. Each

ID: 2422956 • Letter: C

Question

Calhoun Company has a

direct labor standard of 15 hours per unit of output. Each employee

has a standard wage rate of $14 per hour. The standard variable overhead rate is $10 per hour.

During March, employees worked 13,100 hours. The direct labor rate variance was $9,170

favora

ble, the variable overhead rate variance was $13,100 unfavorable, and the direct labor

efficiency variance was $15,400 unfavorable. What is the variable overhead efficiency variance?

$13,100 unfavorable

$11,000 unfavorable

$24,100 unfavorable

$11,000 favorable

Calhoun Company has a

direct labor standard of 15 hours per unit of output. Each employee

has a standard wage rate of $14 per hour. The standard variable overhead rate is $10 per hour.

During March, employees worked 13,100 hours. The direct labor rate variance was $9,170

favora

ble, the variable overhead rate variance was $13,100 unfavorable, and the direct labor

efficiency variance was $15,400 unfavorable. What is the variable overhead efficiency variance?

$13,100 unfavorable

$11,000 unfavorable

$24,100 unfavorable

$11,000 favorable

Variable overhead efficiency variance=Standard overhead rate x (Actual hours - standard hours)

Standard OH rate =$10 per hour

Actual hours= 13,100 hours

Standard hours = Number of units * standard hour per unit = 800*15 =12000

Therefore Variable overhead efficiency variance= 10(13,100-12000) = $11,000

Answer option D $11,000 Favorable

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