HomeworkLib
Question

A company uses a standard costing system. At the end of the current year, the company...

A company uses a standard costing system. At the end of the current year, the company provides the following overhead information: Actual overhead incurred:Variable $90,000 Fixed 62,000 Budgeted fixed overhead 65,000Variable overhead rate (per direct labor hour) 8 Standard hours allowed for actual production) 12,000 Actual labor hours used 11,000  

What amount is the variable overhead efficiency variance? a)$8,000 favorable b)$8,000 unfavorable c)$6,000 favorable d)$2,000 unfavorable

business   accounting   
0 0
Add a comment Improve this question Transcribed image text
Next > < Previous
Sort answers by oldest

Homework Answers

Answer #1

​​​​​The correct option is (a) i.e., $8000 favourable.

As we know that,

variable overhead efficiency variance

= (Actual labour hrs. used - Standard labour hrs. for actual production) × variable overhead rate

= ($11000 - $12000) × $8

= -$1000 × $8

= -$8000 , which is favorable.

​​​​​​_____×_____

ALL THE BEST

Keep Learning

1 0
Add a comment
Know the answer?
Add Answer to:
A company uses a standard costing system. At the end of the current year, the company...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions

  • A company uses a standard costing system. At the end of the current year, the company...

    A company uses a standard costing system. At the end of the current year, the company provides the following overhead information. Actual overhead incurred    Variable $86,000    Fixed $64,500 Budgeted fixed overhead $65,000 Fixed overhead rate (per direct labor hour) $         5 Standard hours allowed for actual production 12,000 Actual labor hours used 11,000 What amount is the volume variance? .$5,000 favorable b.$2,500 favorable c.$2,500 unfavorable d.$5,000 unfavorable

  • 1. Colina Production Company uses a standard costing system. The following information pertains to the current...

    1. Colina Production Company uses a standard costing system. The following information pertains to the current year. Direct labor hours is the driver used to assign overhead costs to products. Actual production 5,500 units Actual factory overhead costs ($16,500 is fixed) $40,125 Actual direct labor costs (11,250 hours) $131,625 Standard direct labor for 5,500 units: Standard hours allowed 11,000 hours Labor rate $12.00 The factory overhead rate is based on an activity level of 10,000 direct labor hours. Standard cost...

  • Use the following information for the next three questions. Oak Company uses a standard costing system....

    Use the following information for the next three questions. Oak Company uses a standard costing system. Manufacturing overhead costs are applied to products on the basis of direct labor hours. The standard cost card shows that 5 direct labor hours at the hourly rate of $25 per hour are required per unit of product. Oak Company had the following data for March: Actual Budgeted Units produced 22,000 20,000 Direct labor hours 105,000 100,000 Variable overhead costs $91,000 $80,000 Fixed overhead...

  • Bovar Company began the manufacture of new paging machines. The company installed a standard costing system...

    Bovar Company began the manufacture of new paging machines. The company installed a standard costing system to account for manufacturing costs. The standard cost per unit is:               Direct materials   3 pound @ $5 per pound               Direct labor         .5 hours @ $20 per direct labor hour               Variable overhead       75% of direct labor cost Actual production was 4,000 units; actual sales were 2,500 units. There is no beginning inventory for direct materials. Other data are: Materials price variance is...

  • QUESTION 4 ABC Company uses a standard absorption costing system that allocates overhead on the basis...

    QUESTION 4 ABC Company uses a standard absorption costing system that allocates overhead on the basis of direct labor hours. Here is their Statement of Gross Margin: Statement of Gross Margin Standard Revenue 1,000,000 Sales price variance (30,000) Sales volume variance 60,000 Net revenue 1,030,000 CGS @ Standard 700,000 Total direct labor variance 30,000 Direct materials price variance (50,000) Direct materials quantity variance 40,000 Fixed overhead budget variance 50,000 Fixed overhead volume variance (100,000) Variable overhead spending variance 20,000 Variable...

  • QUESTION 1 Jordan Company produces basketballs and uses a standard costing system. Budgeted fixed overhead was...

    QUESTION 1 Jordan Company produces basketballs and uses a standard costing system. Budgeted fixed overhead was $300,000. Rent changed during the year, causing actual fixed overhead to be $269,000. Jordan Company applies overhead on the basis of DLH. They projected 1,000,000 basketballs would be produced during the year. They actually produced 1,267,000 basketballs. The standard is 1 DLH/basketball. They actually used 1 DLH/basketball. What is the fixed overhead volume variance? (Please indicate overapplied fixed overhead with the letter "o" and...

  • Li Pong company uses a standard costing system. Last year they incurred $100,000 of Variable Overhead...

    Li Pong company uses a standard costing system. Last year they incurred $100,000 of Variable Overhead and $317,000 of Fixed Overhead and had the following variances before closing entries. FOH Budget Variance $2,000 F FOH Volume Variance $2,000 U VOH Spending Variance $9,000 F VOH Efficiency Variance - $3,000 U How much overhead was applied to inventory over the course of the year? (Answer in dollars) Druid Company makes a single product and uses a standard costing system that applies...

  • QUESTION 7 Likert company manufactures extremely accurate scales. They use a standard costing system. Last year...

    QUESTION 7 Likert company manufactures extremely accurate scales. They use a standard costing system. Last year the company projected that 290,000 scales would be produced. When Likert company closed out manufacturing overhead, they recorded a $116,000 debit to the FOH Budget Variance and a $135,000 credit to the FOH Volume Variance. Likert company budgeted $2,409,000 of fixed overhead. What was the actual amount of fixed overhead? QUESTION 8 If a firm uses direct labor hours as its overhead driver, a...

  • Overhead Variances, Four-Variance Analysis Oerstman, Inc., uses a standard costing system and develops its overhead rates...

    Overhead Variances, Four-Variance Analysis Oerstman, Inc., uses a standard costing system and develops its overhead rates from the current annual budget. The budget is based on an expected annual output of 125,000 units requiring 500,000 direct labor hours. (Practical capacity is 520,000 hours.) Annual budgeted overhead costs total $840,000, of which $595,000 is fixed overhead. A total of 119,300 units using 498,000 direct labor hours were produced during the year. Actual variable overhead costs for the year were $262,000, and...

  • Druid Company makes a single product and uses a standard costing system that applies overhead on...

    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 400 units. Their static budget indicated expectations of 500 units, 2,000 DLH and $60,000 in variable overhead. Actual VOH totaled $40,000. What was the variable overhead efficiency variance? Please indicate favorable variances with an "f" and unfavorable variances with a "u" (Round to the nearest dollar at the end of...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT