A manufacturing company that has only one product has established the following standards for its variable manufacturing overhead. Variable manufacturing overhead standards are based on machine-hours. What is the variable overhead efficiency variance for the month? A) $7,932 U B) $5,893 F C) $29,181 U D) $5,893 U Solution variable overhead efficency variance = (SH - AWH ) SR per hour = ( 2400*2.9 - 9700 ) 10.65 = (6960 -9700 ) 10.65 = $29181 U .

1. A manufacturing company that has only one product has established the following standards for
its variable manufacturing overhead. Variable manufacturing overhead standards are based on
machine-hours.
What is the variable overhead efficiency variance for the month?
A) $7,932 U
B) $5,893 F
C) $29,181 U
D) $5,893 U
Standard hours per unit of output 2.90 machine-hours
Standard variable overhead rate $10.65 per machine-hour
Solution
variable overhead efficency variance = (SH - AWH ) SR per hour
= ( 2400*2.9 - 9700 ) 10.65
= (6960 -9700 ) 10.65
= $29181 U