Freytag Corporation's variable overhead is applied on the basis of direct labor-hours. The company has established the
Question:
Freytag Corporation's variable overhead is applied on the basis of direct labor-hours. The company has established the following variable overhead standards for product NO6C.
Standard direct labor-hours 4.0 hours per unit of N06C
Standard variable overhead rate 4.70 per hour
The following data pertain to the most recent month's operations during which 2.200 units of product N06C were made:
Actual direct labor-hours worked 8,700
Actual variable overhead incurred $ 41,480
Required:
- What was the variable overhead rate variance for the month?
- What was the variable overhead efficiency variance for the month?
Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.)
Cost management a strategic approach
ISBN: 978-0073526942
5th edition
Authors: Edward J. Blocher, David E. Stout, Gary Cokins