Question
Jupiter Corp. applies overhead on the basis of direct labour hours and uses a standard costing system. Each unit of product requires three direct labour
Jupiter Corp. applies overhead on the basis of direct labour hours and uses a standard costing system. Each unit of product requires three direct labour hours. Production for the upcoming month was projected to be 22,000 units, with manufacturing overhead projected to be $549,120 for the month (25% of which is fixed overhead). During the month, 21,000 units were produced, and a total of 65,000 direct labour hours were used. Actual overhead spending for the month was $412,750 in variable overhead and $107,250 in fixed overhead. What is the variable overhead efficiency variance?
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