C|ezto.mheducation.com/hm.tpx Question 3 (of 20) 3. vae 5.00 points Branch Corp.

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C|ezto.mheducation.com/hm.tpx Question 3 (of 20) 3. vae 5.00 points Branch Corp. uses a standard cost system to account for the costs of its one product. Variable overhead is applied using direct labor hours. Standards allowed for each unit are 3.0 hours of labor at a variable overhead rate of $10. During November, Branch Corp. produced 2,250 units. Payroll totaled $97,750 for 7,100 hours worked. Variable overhead incurred totaled $73,460 a. Caloulate the variable overhead rate variance. (Do not round your intermediate calculations. Indicate the effect of variance by selecting "Favorable", "Unfavorable", or "None" for no effect i.e., zero variance).) b. Calculate the variable overhead efficiency variance. (Indicate the offect of variance by selecting Favorable" "Unfavorable", or "None" for no effect (i.e., zero variance))

Explanation / Answer

Variable overhead rate variance = (standard rate-actual rate)actual hours

                                              = (10*7100-73460)

Variable overhead rate variance = 2460 unfavourable

Variable overhead efficiency variance = (standard hours-actul hours)standard rate

                                                      = (2250*3-7100)10

Variable overhead efficiency variance = 3500 Unfavourable

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