Kris Company Calculates Its Predetermined Rates Using Practical Volume, Which

question 72

Multiple Choice

Kris Company calculates its predetermined rates using practical volume, which is 325,000 units.The standard cost system allows 3 direct labor hours per unit produced.Overhead is applied using direct labor hours.The total budgeted overhead is $4,260,000, of which $994,000 is fixed overhead.The actual results for the year are as follows:

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Calculate the variable overhead efficiency variance.

• A) $36,850 U
• B) $80,000 U
• C) $36,850 F
• D) $4,000 U
• E) None of these.

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