Question

The following data has been provided by Moretta Corporation, a company that produces forklift trucks:

Budgeted production                          3400 trucks

Standard machine-hours per truck    2.9 machine-hours

Standard supplies cost                          $1.50 per machine hour

Actual production                                   3800 trucks

Actual machine-hours                            10930 machine-hours

Actual supplies cost (total)                     $17496

Supplies cost is an element of variable manufacturing overhead. The variable overhead efficiency variance for supplies cost is:

A) $135 U

B) $135 F

C) $966 U

D) $966 F

Answer 1

B) $135 F
	Standard			Actual
Particulars	Hours	Rate	amount	Hours	Rate	amount
Overhead	11,020.00	1.50	16,530.00	10,930.00	1.6007	17,496.00
Actual output	3,800.00
Labour hrs reqd (3800 * 2.9)	11,020.00
VOEV = (SH-AH)SR
VOEV = (11,020 - 10,930)1.50
VOEV = (90)1.50
VOEV = 135 F