Descamps Inc. has provided the following data concerning one of the products in its standard cost system. Variable manufacturing overhead is applied to products on the basis of direct labor-hours.
Inputs Standard Quantity or Hours Standard Price or Rate
per Unit of Output
Variable manufacturing overhead 0.20 hours $6.10 per hour
The company has reported the following actual results for the product for July:
Actual output 4,200 units
Actual direct labor-hours 780 hours
Actual variable overhead rate $ 6.20 per hour
The variable overhead efficiency variance for the month is closest to:
Multiple Choice:
O $366 F
O $372 U
O $372 F
O $366 U

Respuesta :

Answer:

Option (A) is correct.

Explanation:

Actual output = 4,200 units

Actual direct labor-hours = 780 hours

Actual variable overhead rate = $6.20 per hour

Variable overhead efficiency variance

= (SLH - ALH) × SR

where,

SLH = Standard labor hour

ALH = Actual direct labor hours

SR = Standard Rate  per Unit of Output

= [(4,200 × 0.20) - 780] × 6.10

= (840 - 780) × 6.10

= 366 Favorable