Question

Fletcher Company collected the following data regarding production of one of its products. Compute the variable overhead efficiency variance.
Direct labor standard (2 hrs. @ $12.75/hr.) $25.50 per finished unit
Actual direct labor hours 81,500 hrs.
Budgeted units 42,000 units
Actual finished units produced 40,000 units
Standard variable OH rate (2 hrs. @ $14.30/hr.) $28.60 per finished unit
Standard fixed OH rate ($336,000/42,000 units) $8.00 per unit
Actual cost of variable overhead costs incurred $1,140,000
Actual cost of fixed overhead costs incurred $ 338,000

A.$14,300 unfavorable.
B.$21,450 favorable.
C.$4,000 unfavorable.
D.$4,000 unfavorable.
E.$21,450 unfavorable.

Answer

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