Question: Access Systems allocates manufacturing overhead based on machine hours. Each connector should require 10 machine hours. According to the static budget, Access expected to incur
Access Systems allocates manufacturing overhead based on machine hours. Each connector should require 10 machine hours. According to the static budget, Access expected to incur the following:
500 machine hours per month (50 connectors x 10 machine hours per connector)
$7,000 in variable manufacturing overhead costs
$8,525 in fixed manufacturing overhead costs
During August, Access actually used 1,000 machine hours to make 120 connectors and spent $5,800 in variable manufacturing costs and $8,000 in fixed manufacturing overhead costs. Calculate the variable overhead efficiency variance for Access.
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