A Manufacturing Company That Has Only One Product Has Established

question 189

Multiple Choice

A manufacturing company that has only one product has established the following standards for its variable manufacturing overhead. The company uses machine hours as its measure of activity.
$\begin{array}{|l|r|}\hline \text { Standard Hours per Unit of Output } & 8.1 \text { machine hours } \\\hline \text { Standard Variable Overhead Rate } & \$ 14.30 \text { per machine hour } \\\hline\end{array}$
The following data pertain to operations for the last month:
$\begin{array}{|l|r|}\hline \text { Actual Hours } & 1,700 \text { machine hours } \\\hline \text { Actual Total Variable Overhead Cost } & \$ 24,905 \\\hline \text { Actual Output } & 200 \text { units } \\\hline\end{array}$
-What was the variable overhead efficiency variance for the month?

• A) $567 favourable.
• B) $1,144 unfavourable.
• C) $1,172 favourable.
• D) $1,172 unfavourable.

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