King Company estimated that it would operate its manufacturing facilities at 800,000 direct labour hours for the
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Question:
King Company estimated that it would operate its manufacturing facilities at 800,000 direct labour hours for the year, which served as the denominator activity in the predetermined overhead rate. The total budgeted manufacturing overhead for the year was $2,000,000, of which $1,600,000 was variable and $400,000 was fixed. The standard variable overhead rate was $2 per direct labour hour. The standard direct labour time was 3 direct labour hours per unit. The actual results for the year are presented below:
Actual Finished Units 250,000
Actual Direct Labour Hours 764,000
Actual Variable Overhead $1,610,000
Actual Fixed Overhead $ 392,000
What was the variable overhead efficiency variance for the year?
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