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Day Inc., uses a standard cost system. Last year's records showed the following information: Actual direct labor hours 35,500 Actual factory overhead ($35,000 fixed) $112,400
Day Inc., uses a standard cost system. Last year's records showed the following information:
Actual direct labor hours | 35,500 |
Actual factory overhead ($35,000 fixed) | $112,400 |
Actual units produced | 12,000 |
Standard direct labor hours per unit | 3 |
Standard variable overhead rate per direct labor hour | $2 |
Standard fixed overhead rate per direct labor hour | $0.75 |
The overhead budget for a 15,000 unit planned activity: | |
Variable overhead | $90,000 |
Fixed overhead | 33,750 |
Total | $123,750 |
What is the variable overhead efficiency variance?
$6,400 unfavorable | ||
$6,400 favorable | ||
$1,000 unfavorable | ||
$1,000 favorable |
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