Economics · Cost and Management Accounting
Actual production was 1,500 units, completed in 3,620 hours at a variable overhead cost of $11,000. The budgeted standards were 2.5 hours per unit and a variable overhead absorption rate of $3 per hour. Calculate the variable overhead expenditure variance and variable overhead efficiency variance.
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1Expenditure Variance = $250 Favorable; Efficiency Variance = $300 Adverse
- 2Expenditure Variance = $250 Adverse; Efficiency Variance = $300 Favorable
- 3Expenditure Variance = $140 Favorable; Efficiency Variance = $390 Adverse
- 4Expenditure Variance = $140 Adverse; Efficiency Variance = $390 Favorable✓
Correct answer
Expenditure Variance = $140 Adverse; Efficiency Variance = $390 Favorable
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