Variable overhead efficiency variance for the period

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Reference no: EM131208019

Derf Corporation uses a standard cost system in which it applies manufacturing overhead on the basis of standard direct labor-hours. Two direct labor-hours are required for each unit produced. The denominator activity was set at 7,200 units. Manufacturing overhead was budgeted at $90,000 for the period; 20 percent of this cost was fixed. The 13,600 hours worked during the period resulted in production of 6,550 units. Variable manufacturing overhead cost incurred was $72,300 and fixed manufacturing overhead cost was $21,500.

The variable overhead efficiency variance for the period was:

A. $3,500 Unfavorable

B. $4,300 Unfavorable

C. $1,625 Unfavorable

D. $2,500 Unfavorable

Reference no: EM131208019

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