A company using standard costing allocates variable manufacturing overhead (VMOH) using direct-labor hours consumed by its products.

Fantastic news! We've Found the answer you've been seeking!

Question:

A company using standard costing allocates variable manufacturing overhead (VMOH) using direct-labor hours consumed by its products. If the efficiency variance for direct labor for a particular product is $20,000 (U) for a particular period, the efficiency variance for the product’s VMOH for that period is

$20,000 (U)
$20,000 (F)Unfavorable but dollar magnitude may be different
Favorable but dollar magnitude may be different