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Chrome File Edit View History Bookmarks People Window Help 62 , 26% D- Sun 6:56 PM a : YOSEF C ?ezto.mheducation.com/hm.tpx Question 2 (of 3) Save & E Submit 2 3.00 points E9-15 Calculating Variable Manufacturing Overhead Variances [LO 9-5] See Clear Company manufactures clear plastic CD cases. It applies variable overhead based on the number of machine hours used. Information regarding See Clear's ovemead for the month of December follows: Standard Quantity 0.1 machine hours per Standard Unit Cost $0.09 Standard Rate $0.90 per machine hour overhead During December, See Clear had the following actual results: Number of units produced and sold Actual variable overhead cost Actual machine hours 800,000 $ 58,000 64,000 Required: Compute See Clear's variable overhead rate variance, variable overhead efficiency variance, and over- or underapplied variable overhead. (Do not round intermediate calculations. Indicate the effect of cach variance by selecting "F for Favorable/Overapplied and "U" for Unfavorable/Underapplied.) Variable Overhead Rate Variance Variable Overhead Elliciency Variance Over- or Underapplied Variable Overhead ReferenceseBook & Resources Worksheet Difficulty: 2 Medium

Explanation / Answer

Variable overhead Rate Variance Actual Variable Overheads - Standard Variable Overheads 58000 - (Actual hours*standard rate per hour) 58000 - (64000*0.90) 58000-57600 400 Unfavourable Variable Overheads Efficiency Variance Standard variable overhead rate per hour * (Actual hours – Standard hours of actual production) 0.90*(64000-(600000*0.1)) 0.90*(64000-60000) 0.90*4000 3600 Unfavourable Over or Under applied Variable Overheads Actual Overheads = 58000 Applied Overheads = (64000*0.90) = 57600 Under Applied by 300

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