Question

QUESTION 3 Note the change in numbers from the previous problem. Druid Company makes a single product and uses a standard costing system that applies overhead on the basis of direct labor hours. They recently used 2,000 labor hours to produce 300 units. Their static budget indicated expectations of 500 units, 3,000 DLH and $60,000 in variable overhead. Actual VOH totaled $30,000. What was the variable overhead efficiency variance? Please indicate favorable variances with an "T and unfavorable variances with a "u" (Round to the nearest dollar at the end of your calculations)

Answer 1

Vanable overhead elficiency vorrance : - standard ratex (standard hours - Actual hours) in the formula:- Standard hours - Standard hours Requred for Actual one output. standard Rate = $ 60000 - 3000 hours $20 per hout standard bours = 300 units x 3000 hours 500 units =) ** 1800 hours Actual hours -> 2000 bours. -) $20 x ( 1800 hours - 2000 hours ) => $20 * (-200 hours) » - $4000 lunfavourable) vunable overhead ethuency vanance = 44000 (0)