Question

Hurren Corporation makes a product with the following standard costs: Standard Standard Price Standard Cost Quantity or Per Unit or Rate Hours $8.00 per gram Direct materials 4.0 grams $32.00 $7.20 $12.00 per hour Direct labor 0.6 hours Variable $8.00 per hour $4.80 0.6 hours overhead The company reported the following results concerning this product in June. 7,300 Originally budgeted output units Actual output 7,200 units Raw materials used in production 28,340 grams 4,100 Actual direct labor-hours hours Purchases of raw materials 31,400 grams Actual price of raw materials purchased per $8.10 gram per $12.90 Actual direct labor rate hour per $7.70 Actual variable overhead rate hour The company applies variable overhead on the basis of direct labor-hours. The direct materials purchases variance is computed when the materials are purchased. The variable overhead efficiency variance for June is:

Answer 1

Varaible OH Standard Rate SR 8.00 Per hour Standard hours per unit 0.60 hours Standard Hours for Actual output SH 4320 Hours Actual Output 7200 Units Actula hours AH 4100 hours Answer: $ 1760 Favorable (or) $-1760 F Overhead Efficiency Varaince (AH*SR)-(SH*SR)= (4320-4100)*8.00 1760 Favorable