5 TB MC Qu. 10-190 Juhasz Corporation makes a product with the following Juhasz

Question

5 TB MC Qu. 10-190 Juhasz Corporation makes a product with the following Juhasz Corporation makes a product with the following standards for direct labor and variable overhead Standard Price or Rate $23.00 per hour $ 4.30 per hour Standard Quantity or 10 points Direct labor Variable overhead Hours 0.50 hours 0.50 hours In August the company produced 8,200 units using 4,250 direct labor-hours. The actual variable overhead cost was $17,000. The company applies variable overhead on the basis of direct labor-hours The variable overhead efficiency variance for August is Multiple Choice $645 U $645 F $600 F $600 U

Explanation / Answer

SOLUTION

Variable overhead efficiency variance = $645 U

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

= [4,250 - (8,200*0.50)] * $4.30

= (4,250 - 4,100)* $4.30

= 150 * $4.30

= 645 U

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