A Manufacturing Company That Has Only One Product Has Established

question 218

Multiple Choice

A manufacturing company that has only one product has established the following standards for its variable manufacturing overhead. The company uses direct labour hours (DLHs) as its measure of activity.
$\begin{array}{|l|r|}\hline \text { Standard Hours per Unit of Output } & 7.2 \mathrm{DLHs} \\\hline \text { Standard Variable Overhead Rate } & \$ 14.20 \text { per DLH } \\\hline\end{array}$
The following data pertain to operations for the last month:
$\begin{array}{|l|r|}\hline \text { Actual Direct Labour Hours } & 5,100 \text { DLHs } \\\hline \text { Actual Total Variable Overhead Cost } & \$ 72,165 \\\hline \text { Actual Output } & 600 \text { units } \\\hline\end{array}$
-What was the variable overhead efficiency variance for the month?

• A) $216 unfavourable.
• B) $11,037 favourable.
• C) $11,037 unfavourable.
• D) $11,076 unfavourable.