James manufacturing produced 3,000 units during June even though the company had anticipated producing 2,800 units. The
Question:
James manufacturing produced 3,000 units during June even though the company had anticipated producing 2,800 units. The company's employees actually logged 3,200 hours during the month. The company's standard costing system allocates variable overhead at a rate of \($6.00\) per direct labor hour. Standards also dictate 1 direct labor hour per unit produced. Assume that James actually incurred \($19,500\) of variable overhead costs. Which of the following is true?
a. The variable overhead rate variance is \($300\) favorable.
b. The variable overhead efficiency variance is is \($1,400\) unfavorable.
c. The variable overhead efficiency variance is \($1,000\) unfavorable.
d. The variable overhead rate variance is \($300\) unfavorable.
Step by Step Answer:
Managerial Accounting For Undergraduates
ISBN: 9780357499948
2nd Edition
Authors: James Wallace, Scott Hobson, Theodore Christensen