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Ganges Inc. uses a standard costing system in which variable manufacturing overhead (VMOH) is applied based on standard direct labor hours (DLHs). Partial results for the most recent period were:
Budgeted VMOH cost.........................$18,600
Budgeted units of production...............775 units
Actual VMOH cost incurred................$22,620
Actual DLHs for the period ..............1600 DLHs
Actual unit produced..........................750 units
VMOH rate variance........................$3,420 Unfavorable
VMOH Efficiency Variance..............$1,200 Unfavorable
Standard DLHs allowed for the period was closest to:
A. 1,500 DLHs
B. 1,985 DLHs
C. 1,316 DLHs
D. 1,464 DLHs
E. None of the above.
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