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Gentile Corporation makes a product with the following standard costs: |
| Standard Quality or Hours | Standard Price or Rate | |
| Inputs | ||
| Direct materials | 7.5 kilos | $9.00 per kilo |
| Direct labor | 1.0 hours | $15.60 per hour |
| Variable overhead | 1.0 hours | $5.40 per hour |
The company produced 6,200 units in May using 37,930 kilos of direct material and 4,500 direct labor hours. During the month, the company purchased 41,540 kilos of the direct material at $6.30 per kilo. The actual direct labor rate was $16.90 per hour and the actual variable overhead rate was $5.10 per hour.
The company applies variable overhead on the basis of direct labor hours. The direct materials purchases variance is computed when the materials are purchased.
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The variable overhead efficiency variance for May is: |
| $8,670 U | |
| $9,180 F | |
| $9,180 U | |
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$8,670 F Will not rate if no work is given. Thank you 🙂 |