What was the variable overhead efficiency variance

Reference no: EM1341402

Direct-labor hours: manufacturing company

A manufacturing company has a standard costing system based on standard direct labor-hours (DLHs) as the measure of activity. Data from the company's flexible budget for manufacturing overhead are given below:

Denominator level of activity 1,000 DLHs
Overhead costs at the denominator activity level:
Variable overhead cost $3,000
Fixed overhead cost $14,000

The following data pertain to operations for the most recent period:

Actual hours 1,160 DLHs
Standard hours allowed for the actual output 905 DLHs
Actual total variable overhead cost $5,130
Actual total fixed overhead cost $11,900

What was the variable overhead efficiency variance for the period to the nearest dollar? (Round off your answer to the nearest whole dollar.)

a) $1,315 U
b) $765 U
c) $1,026 F
d) $397 F

Reference no: EM1341402

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