Question
Hurren Corporation makes a product with the following standard costs: Standard Quantity or HoursStandard Price or RateStandard Cost PerUnitDirect materials5.4 grams$8.00 per gram$43.20Direct labor0.9 hours$19.00
Hurren Corporation makes a product with the following standard costs:
Standard Quantity or HoursStandard Price or RateStandard Cost PerUnitDirect materials5.4 grams$8.00 per gram$43.20Direct labor0.9 hours$19.00 per hour$17.10Variable overhead0.9 hours$8.00 per hour$7.20
The company reported the following results concerning this product in June.
Originallybudgetedoutput5,600unitsActual output5,500unitsRaw materials used in production28,480gramsActual direct labor-hours4,700hoursPurchases of raw materials32,800gramsActual price of raw materials purchased$8.10per gramActual direct labor rate$19.90per hourActual variable overhead rate$7.70per hour
The company applies variable overhead on the basis of direct labor-hours. The direct materials purchases variance is computed when the materials are purchased.
The variable overhead efficiency variance for June is:
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