Question 1
Cold Products Corporation manufactured 27,000 ice chests during September. The variable overhead cost-allocation base is $11.75 per machine-hour. The following variable overhead data pertain to September:
| Production | 27,000 units | 26,000 units |
| Machine-hours | 13,500 hours | 7,800 hours |
| Variable overhead cost per machine-hour: | $11.25 | $11.75 |
What is the variable overhead efficiency variance?
◦ $6,750 favorable
◦ $63,450 unfavorable
◦ $56,700 unfavorable
◦ $66,975 unfavorable
Question 2
Cold Products Corporation manufactured 32,000 ice chests during September. The variable overhead cost-allocation base is $13.45 per machine-hour. The following variable overhead data pertain to September:
| Production | 32,000 units | 26,000 units |
| Machine-hours | 15,200 hours | 10,800 hours |
| Variable overhead cost per machine-hour: | $13.25 | $13.45 |
What is the variable overhead spending variance?
◦ $3,040 favorable
◦ $25,658 unfavorable
◦ $22,618 unfavorable
◦ $59,180 unfavorable
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