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Unformatted text preview: 2,000 pants. Actual variable manufacturing overhead for the month was $11,500. Problem Solution: Actual Rate = $11,500/2500= $4.6/hr Standard Rate = 1.3 hrs x 2000 = hours 2600 Spending Variance = 2500($4.6-$5.0) = ($1000) Favorable Efficiency Variance = $5(2500-2600) = ($500) Favorable Significance : Spending variance $1000 favorable means that variable overhead was less than the standard by .40 cents per hour. Efficiency variance of $500 variable means that the level of output required less overhead than the amount of overhead than the standards required. Solution...
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This note was uploaded on 04/21/2011 for the course ACTG 211 taught by Professor Staff during the Spring '08 term at Ill. Chicago.
- Spring '08
- Managerial Accounting