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Unformatted text preview: that total variable costs are $5,330 and that 6,500 direct labor hours were incurred, the actual variable overhead costs per direct labor hour rate was $0.82. The $108 favorable efficiency variance is determined by subtracting $4,788 standard overhead (13,300 units by the variable overhead per unit predetermined rate of $0.36) from the flexible budget variable overhead cost of $4,680. It occurred because it took only 6,500 direct labor hours instead of 6,650 (13,300 units .5 hours per unit) direct labor hours to produce the 13,300 units. The total variable cost variance of $542 is calculated by adding the $650 unfavorable spending variance and the $108 favorable efficiency variance....
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- Spring '09