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(Solved) (Latest ver. Aug 2020) - Litton Company: Variable Manufacturing Overhead

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Use the following to answer question 24:

The Litton Company has established standards as follows:
Direct material3 lbs. @ $4/lb. = $12 per unit
Direct labor2 hrs. @ $8/hr. = $16 per unit
Variable manuf. Overhead2 hrs. @ $5/hr. = $10 per unit

Actual production figures for the past year are given below. The company records the materials price variance when materials are purchased.
Units produced600
Direct material used2,000 lbs.
Direct material purchased (3,000 lbs.)$11,400
Direct labor cost (1,100 hrs.)$ 9,240
Variable manuf. overhead cost incurred$ 5,720

The company applies variable manufacturing overhead to products on the basis of direct labor hours.

24.The variable overhead efficiency variance is:
A)$520 F. C)$500 U.
B)$520 U. D)$500 F.


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