HyTech Production Company Uses a Standard Costing System What Is the Variable Overhead Efficiency Variance for HyTech Production

question 31

Multiple Choice

HyTech Production Company uses a standard costing system.The following information pertains to the current year. The factory overhead rate is based on an activity level of 10,000 units.Standard cost data for 5,000 units is as follows:
$\begin{array}{lr}\text { Actual factory overhead costs }(\$ 16,500 \text { is }\\\text { fixed) }&\$40,125\\\text { Actual direct labour costs }(11,250 \text { hours }) &\$131,625\\\text { Standard direct labour for } 5,500 \text { units: }\\\text { Standard hours allowed }&11,000 \text { hours }\\\text { Labour rate }&\$12.00\end{array}$
What is the variable overhead efficiency variance for HyTech Production Company?
$\begin{array}{lr}\text { Variable factory overhead } & \$ 22,500 \\\text { Fixed factory overhead } & 13,500 \\\text { Total factory overhead } & \$ 36,000\end{array}$

• A)$562.50 (U)
• B)$562.50 (F)
• C)$1,687.50 (F)
• D)$3,000.00 (U)

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Definitions:

Consumption

Utilization of products and services by household members.

Present Value

The contemporary estimate of a future monetary sum or cash flows, evaluated with a given return rate.

Investment Projects

Initiatives or plans undertaken by individuals or organizations to allocate resources with the expectation of generating future profits.

Budget Set

The collection of all possible bundles of goods and services that a consumer can afford given their income and the prices of goods.