Reference no: EM132827916
Desks Company (DC) provided the following information:
Budgeted Variable Manufacturing Overhead (VOH): $54,000
Budgeted Fixed Manufacturing Overhead (FOH): $162,000
Budgeted Production: 18,000 units
Budgeted Direct Labor Hours (DLH): 27,000 hours
Budgeted DLH per Unit: 1.5 DLH
Standard: VOH 1.5 DLH @ $2 per Hour: $3 per unit
Standard: FOH 1.5 DLH @ $6 per Hour: $9 per unit
Actual VOH: $68,250
Actual FOH: $148,000
Actual Production: 20,000 units
Actual DLH: 32,500
Problem 1: Based on the above information and assuming that DLH is a useful predictor of VOH, what is DC's variable overhead efficiency variance?
A: $5,000 Unfavorable
B: $3,250 Unfavorable
C: $3,250 Favorable
D: $5,000 Favorable
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