Dance Company Has a Standard Variable Overhead Rate of $4

Dance Company has a standard variable overhead rate of $4.50 per machine hour, and each unit produced has a standard time allowed of three hours. The company's static budget was based on 46,000 units. Actual results for the year follow: Actual units produced: 42,000
Actual machine hours worked: 120,000
Actual variable overhead incurred: $520,000
Dance's variable-overhead efficiency variance is:

A) $9,200 favourable.
B) $20,000 favourable.
C) $20,000 unfavourable.
D) $27,000 favourable.
E) $27,000 unfavourable.

Correct Answer:

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