Math Problem Statement
The Maxit Corporation has a standard costing system in which variable manufacturing overhead is assigned to production on the basis of standard machine-hours. The following data are available for July:
Actual variable manufacturing overhead cost incurred: $25,480
Actual machine-hours worked: 2,900 hours
Variable overhead rate variance: $5,370 U
Total variable overhead spending variance: $7,480 U
The variable overhead efficiency variance for July is:
Multiple Choice
$2,110 U
$12,850 U
$12,850 F
$2,110 F
Solution
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Math Problem Analysis
Mathematical Concepts
Cost Accounting
Variance Analysis
Algebra
Formulas
Efficiency Variance = Standard Rate × (Actual Hours - Standard Hours Allowed)
Spending Variance = Rate Variance + Efficiency Variance
Theorems
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Suitable Grade Level
Undergraduate (Accounting or Business Studies)
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