Asked by Jasleen Sekhon on May 07, 2024
Verified
Pleiss Corporation applies manufacturing overhead to products on the basis of standard machine-hours.The company's standard variable manufacturing overhead rate is $2.40 per machine-hour.The actual variable manufacturing overhead cost for the month was $5,240.The original budget for the month was based on 2,100 machine-hours.The company actually worked 2,270 machine-hours during the month.The standard hours allowed for the actual output of the month totaled 2,280 machine-hours.What was the variable overhead efficiency variance for the month?
A) $24 Favorable
B) $232 Favorable
C) $208 Favorable
D) $432 Unfavorable
Variable Overhead Efficiency Variance
This measures the difference between the actual variable overhead costs incurred and the standard costs expected for the actual production level achieved, pertaining to efficiency in managing variable overheads.
Machine-Hours
The total operational hours recorded for all machines within a production process, serving as a basis for calculating machine-related costs and efficiencies.
Manufacturing Overhead
All indirect costs associated with the production process, such as utilities, maintenance, and salaries for management.
- Apprehend the impact of different degrees of activity on budget variations and productivity.
Verified Answer
= (2,270 hours - 2,280 hours)× $2.40 per hour
= (-10 hours)× $2.40 per hour
= $24 F
Learning Objectives
- Apprehend the impact of different degrees of activity on budget variations and productivity.
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