The following information is available for Harrison’s Hot Dogs: Actual production 12,320 packages, Budgeted production 12,500 packages, Standard direct labor hours 1.5 direct labor hours per package, actual direct labor hours 19,500, Standard variable overhead rate $3 per direct labor hour, Actual variable overhead costs $50,000. Calculate the variable overhead spending and efficiency variances.

$3,060 Unfavorable

Explanation:

Variable overhead efficiency variance is the difference between the actual time taken to achieve a given production output less the standard hours for same multiplied by the standard variable overhead rate

Variable overhead efficiency variance is determined as follows:

                                                                                                Hours

12,320 packages should have taken (12,320 × 1.5 )           18,480.

but did take                                                                           19,500

Efficiency variance ( in hours  )                                             1,020 Unfav.

× standard variable OH rate                                                 × $3

Variable overhead efficiency variance ($)                       $3,060 Unfavourable

whole quiz

1. the sum of all activities involved in getting high-quality products into the marketplace

2.operations

3. the principle of looking at the supply chain as a whole in order to improve the overall flow through the system.

4. produced; performed

5. activities producing tangible products, such as radios, newspapers, buses, and textbooks.

6. activities producing intangible and tangible products, such as entertainment, transportation, and education.

7.   customer focus

8. analyzing a competitor's products to identify desirable improvements

9. the systematic direction and control of the processes that transform resources into finished projects that create value for and provide benefits to consumers.

10. operation management.

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