Assume the following information appears in the standard cost card for a company that makes only one product:     Standard Quantity or Hours Standard Price or Rate Standard Cost Direct materials 5 pounds $ 11.00 per pound $ 55.00   Direct labor 2 hours $ 17.00 per hour $ 34.00   Variable manufacturing overhead 2 hours $ 3.20 per hour $ 6.40     During the most recent period, the following additional information was available: 20,000 pounds of material was purchased at a cost of $10.50 per pound. All of the material that was purchased was used to produce 3,900 units. 8,000 direct labor-hours were recorded at a total cost of $132,000. The actual variable overhead cost incurred during the period was $25,000. Assuming the company uses direct labor-hours to compute its predetermined overhead rate, what is the variable overhead efficiency variance?   Multiple Choice   $665 F   $665 U   $640 F   $640 U

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
icon
Related questions
icon
Concept explainers
Topic Video
Question

Assume the following information appears in the standard cost card for a company that makes only one product:
 

  Standard Quantity
or Hours
Standard Price
or Rate
Standard Cost
Direct materials 5 pounds $ 11.00 per pound $ 55.00  
Direct labor 2 hours $ 17.00 per hour $ 34.00  
Variable manufacturing overhead 2 hours $ 3.20 per hour $ 6.40  
 


During the most recent period, the following additional information was available:

  • 20,000 pounds of material was purchased at a cost of $10.50 per pound.
  • All of the material that was purchased was used to produce 3,900 units.
  • 8,000 direct labor-hours were recorded at a total cost of $132,000.
  • The actual variable overhead cost incurred during the period was $25,000.

Assuming the company uses direct labor-hours to compute its predetermined overhead rate, what is the variable overhead efficiency variance?

 

Multiple Choice
  •  
    $665 F
  •  
    $665 U
  •  
    $640 F
  •  
    $640 U
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 2 steps

Blurred answer
Knowledge Booster
Costing Systems
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education