Grant Parker, manager of Denver Company, wants to compute the variable overhead efficiency variance for the year. He has the following details: Variable overhead flexible budget variance (unfavorable) $47,250 Budgeted input quantity allowed for actual output 9,000 units Actual input quantity used of cost-allocation base used 10,125 units Budgeted variable overhead cost per unit of cost-allocation base $60 Actual variable overhead cost per unit of cost-allocation base $58 What will be the variable overhead efficiency variance for the year

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Business

Aditya Strickland

22 September, 11:31

Grant Parker, manager of Denver Company, wants to compute the variable overhead efficiency variance for the year. He has the following details: Variable overhead flexible budget variance (unfavorable) $47,250 Budgeted input quantity allowed for actual output 9,000 units Actual input quantity used of cost-allocation base used 10,125 units Budgeted variable overhead cost per unit of cost-allocation base $60 Actual variable overhead cost per unit of cost-allocation base $58 What will be the variable overhead efficiency variance for the year

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Rory Russo · Answer 1

Answer: $67,500 U

Explanation: (Variable overhead efficiency variance = (10,125 - 9,000) * $60 = $67,500 U) (Variable overhead efficiency variance = (Actual quantity of variable overhead cost-allocation base used for actual output - Budgeted quantity of variable overhead cost-allocation base allowed for actual output) * Budgeted variable overhead cost per unit of cost-allocation base)