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Could you please help me with this question?
Budget production 13120 units
Budget fixed OH $45,920
Budget hours 26,240 hoursActual production 12920 units
Actual fixed OH $48,400
Actual hours 25,200 hoursCalculate fixed OH Efficiency Variance
I know the pro forma for this variance yet I am not arriving at the answer shown on the F5 mock exam…Perhaps I am calculating the rates wrong. I calculated standard rate as 45920/26240=$1.75. Is this correct? It would be interesting to see how you arrive at the answer. Thanks in advance.
Actual hours worked = 25,300.
Standard hours for actual production = 12920 units x 26240/13120 = 25840So efficiency variance = (25,840 – 25,200) x $1.75 = $1,120 (Fav)
Thanks for your assistance. Let me just say that Open Tuition is doing an amazing job helping us students. Keep up the good work!
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