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)