Hollowell Audio, Inc., manufactures military-specification compact discs. The company uses standards to control its costs. The labor standards that have been set for one disc are as follows:
Standard Hours: 6 minutes
Standard Rate per Hour: $ 24.00
Standard Cost: $ 2.40
During July, 2,125 hours of direct labor time were required to make 20,000 discs. The direct labor cost totaled $49,300 for the month.The budgeted variable manufacturing overhead rate is $16.00 per direct labor-hour. During July, the company incurred $39,100 in variable manufacturing overhead cost. Compute the variable overhead efficiency and rate variances for the month.
Variable overhead efficiency variance -
Variable overhead rate variance -