The following standards for variable overhead have been established for a company that makes only one product:
The following data pertain to operations for the last month:
Required: a. What is the variable overhead rate variance for the month?b. What is the variable overhead efficiency variance for the month?

a.Variable overhead rate variance = (Actual hours × Actual rate) − (Actual hours × Standard rate)= $80,000 − (5,000 hours × $16.05 per hour)= $80,000 − ($80,250)= $250 Favorableb.Standard Hours = Standard hours per unit × Actual output= 3.6 hours per unit × 1,300 units= 4,680 hoursVariable overhead efficiency variance = (Actual hours − Standard hours) × Standard rate= (5,000 hours − 4,680 hours) × $16.05 per hour= (320 hours) × $16.05 per hour = $5,136 Unfavorable