Assume the following information appears in the standard cost card for a company that makes only one product:

	Standard Quantity or Hours		Standard Price or Rate			Standard Cost
Direct materials	5	pounds	$	11.00	per pound	$	55.00
Direct labor	2	hours	$	17.00	per hour	$	34.00
Variable manufacturing overhead	2	hours	$	4.10	per hour	$	8.20

During the most recent period, the following additional information was available:

• 20,000 pounds of material was purchased at a cost of $10.50 per pound.
• All of the material that was purchased was used to produce 3,900 units.
• 8,000 direct labor-hours were recorded at a total cost of $132,000.
• The actual variable overhead cost incurred during the period was $25,000.

Assuming the company uses direct labor-hours to compute its predetermined overhead rate, what is the variable overhead efficiency variance?

Garrison 17e Rechecks 2020-09-29

Multiple Choice

• $820 F

• $820 U

• $845 U

• $845 F