Underfoot Products Uses Standard Costing Compute the Variable Overhead Efficiency Variance

question 106

Multiple Choice

Underfoot Products uses standard costing.The following information about overhead was generated during May: $\begin{array}{ll}\text { Standard variable overhead rate } & \$ 2 \text { per machine hour } \\\text { Standard fixed overhead rate } & \$ 1 \text { per machine hour } \\\text { Actual variable overhead costs } & \$ 390,000 \\\text { Actual fixed overhead costs } & \$ 175,000 \\\text { Budgeted fixed overhead costs } & \$ 190,000 \\\text { Standard machine hours per unit produced } & 10 \\\text { Good units produced } & 18,000 \\\text { Actual machine hours } & 200.000\end{array}$
Compute the variable overhead efficiency variance.

• A) $50000 (F)
• B) $50000 (U)
• C) $40000 (F)
• D) $30000 (U)

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Definitions:

Chi-Square Test

A statistical test used to determine the significance of an observed association between two categorical variables.

Statistical Test

A method used to determine the significance or importance of data differences or relationships through mathematical calculations.

Independent Variables

Factors in an experiment that are intentionally varied to observe their impact on other variables, essentially the same as an independent variable but rephrased.

One-Way Analysis

Often refers to one-way analysis of variance (ANOVA), a statistical method used to compare the means of three or more samples using variances.