Unformatted text preview: Variable Manufacturing Overhead Efficiency Rate = SR(AH-SH) = 2.40(1,800-1,500) = $7,200 2.) net overall variance = $11,250 + $12,500 + $-1080 + $5400 + $-720 + $7,200 = $34,550 This has a negative impact on the income statement because the company is inefficient. If the net overall variance had produced a negative number, the effect would be positive, but this is not the case. 3.) The two most significant variances that I computed in the above question are the direct materials price variance and the direct materials quantity variance because they are the highest positive numbers that are computed. Positive is bad because it means that the company is inefficient. Two possible causes of these high discrepancies are a too-high actual price, or a too-high actual quantity....
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- Winter '08
- Direct material price variance, Negative and non-negative numbers, materials price variance, $2.50, $2.95, $-720