Asked by Jessa Gesta on Jul 16, 2024
Verified
The variable overhead efficiency variance for January is:
A) $320 F
B) $316 U
C) $320 U
D) $316 F
Variable Overhead Efficiency Variance
A measure used in managerial accounting to assess the efficiency of variable overhead costs incurred relative to the expected amount of those costs.
January
In the Gregorian calendar, the year begins with January, recognized as the first month.
- Assess the efficiency deviations within variable overhead costs.
Verified Answer
JM
JaeVino MoralesJul 21, 2024
Final Answer :
C
Explanation :
Variable overhead efficiency variance measures the cost impact of the difference between actual and expected hours of input required to produce the actual output.
Variable overhead efficiency variance = (AH - SH) × SR
Where,
AH = Actual hours of input used
SH = Standard hours of input allowed for the actual output
SR = Standard rate per hour of the variable overhead cost
Given that,
AH = 7,800 hours
SH = 7,500 hours
SR = $4 per hour
Variable overhead efficiency variance = (7,800 - 7,500) × $4
= $1,200 U
Therefore, the correct option is C) $320 U.
Variable overhead efficiency variance = (AH - SH) × SR
Where,
AH = Actual hours of input used
SH = Standard hours of input allowed for the actual output
SR = Standard rate per hour of the variable overhead cost
Given that,
AH = 7,800 hours
SH = 7,500 hours
SR = $4 per hour
Variable overhead efficiency variance = (7,800 - 7,500) × $4
= $1,200 U
Therefore, the correct option is C) $320 U.
Explanation :
SH = 8,700 units × 0.1 hours per unit = 870 hours
Variable overhead efficiency variance = (AH - SH)× SR
= (910 hours ? 870 hours)× $8.00 per hour
= (40 hours) × $8.00 per hour
= $320 U
Variable overhead efficiency variance = (AH - SH)× SR
= (910 hours ? 870 hours)× $8.00 per hour
= (40 hours) × $8.00 per hour
= $320 U
Learning Objectives
- Assess the efficiency deviations within variable overhead costs.
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