Majer Corporation makes a product with the following standard costs

Majer Corporation makes a product with the following standard costs:


	Standard Quantity or Hours	Standard Price or Rate	Standard Cost Per Unit
Direct materials	6.1 ounces	$3.00 per ounce	$18.30
Direct labor	0.4 hours	$16.00 per hour	$6.40
Variable overhead	0.4 hours	$3.00 per hour	$1.20

The company reported the following results concerning this product in February

Originally budgeted output	5,000 units
Actual output	6,100 units
Raw materials used in production	33,500 ounces
Actual direct labor-hours	2,070 hours
Purchases of raw materials	35,900 ounces
Actual price of raw materials	$57.10 per ounce
Actual direct labor rate	$47.60 per hour
Actual variable overhead rate	$5.70 per hour

The company applies variable overhead on the basis of direct labor-hours. The direct materials purchases variance is computed when the materials are purchased.

The variable overhead efficiency variance for February is:

Solutions

Expert Solution

Variable overhead efficiency variance

= (SLH - ALH) *SVOHR

= (6100*0.4 - 2070) * 3

= (2440 - 2070) * 3

= 1110 Favourable

Comment if you face any issues

ekkarill92 answered 2 years ago

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