Thilges Incorporated makes a single product--a cooling coil used in commercial refrigerators.The company has a standard cost system in which it applies overhead to this product based on the standard machine-hours allowed for the actual output of the period.Data concerning the most recent year appear below: The variable overhead efficiency variance is:

A) $1,740 U
B) $1,398 F
C) $1,740 F
D) $1,398 U

Question

Thilges Incorporated makes a single product--a cooling coil used in commercial refrigerators.The company has a standard cost system in which it applies overhead to this product based on the standard machine-hours allowed for the actual output of the period.Data concerning the most recent year appear below:

The variable overhead efficiency variance is:

A) $1,740 U
B) $1,398 F
C) $1,740 F
D) $1,398 U

Justine Tolentino · Accepted Answer

Final Answer : B, Explanation :  Variable component of the predetermined overhead rate (SR)= $29,125/12,500 machine-hours= $2.33 per machine-hourVariable overhead efficiency variance = (AH - SH)× SR= (10,400 machine-hours - 11,000 machine-hours)× $2.33 per machine-hour= (-600 machine-hours)× $2.33 per machine-hour= $1,398 F

Definitions

Learning Objectives

Learning Objectives

Related questions