A manufacturing company that has only one product has established the following standards for its variable manufacturing overhead. The company bases its variable manufacturing overhead standards on direct labor-hours.

Standard hours per unit of output		5.00	DLHs
Standard variable overhead rate	$	11.63	per DLH

The following data pertain to operations for the last month:

Actual direct labor-hours		8,500	DLHs
Actual total variable manufacturing overhead cost	$	95,970
Actual output		1,600	units

What is the variable overhead efficiency variance for the month?

Multiple Choice

• $2,652 U

• $6,933 U

• $5,815 U

• $6,933 F

The following data for November have been provided by Hunn Corporation, a producer of precision drills for oil exploration:

Budgeted production		4,400	drills
Standard machine-hours per drill		9.7	machine-hours
Standard indirect labor	$	9.50	per machine-hour
Standard power	$	3.10	per machine-hour
Actual production		4,600	drills
Actual machine-hours		36,050	machine-hours
Actual indirect labor	$	345,062
Actual power	$	110,460

Required:

Compute the variable overhead rate variances for indirect labor and for power for November. Indicate whether each of the variances is favorable (F) or unfavorable (U).

(Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.

	Variable Overhead Rate Variance
Indirect labor
Power