Question

Wadding Corporation applies manufacturing overhead to products on the basis of standard machine hours. For the most rec overhead costs for the month appear below month the company based its budget on 4000 machine hours, Budgeted and actual Original Budget Based on 4,000 Machine Hours Actual Costs Variable overhead costs: Supplies $11,200 32,000 $12,230 32.200 Fixed overhead costs 20,100 6,300 6,210 Utilities Factory depreciation Total overhead cost 576.900 $77,990 The company actually worked 4320 machine hours during the month. The standardha warance one month Miple Choice $220 favorable

Answer 1

Budgeted variable overhead = $11,200 + $32,000 Budgeted variable overhead = $43,200 Standard variable overhead rate = $43,200/4,000 Standard variable overhead rate = $10.8 Variable overhead efficiency variance = (Actual hours-Standard hours) *Standard rate Variable overhead efficiency variance = (4,320-4,310) *$10.8 Variable overhead efficiency variance = $108 Unfavorable Hence, the correct option is $108 Unfavorable.