Question: The Maxwell Corporation has a standard costing system in which variable manufacturing overhead is assigned to production on the basis of standard machine-hours. The following data are available for July:
• Actual variable manufacturing overhead cost incurred: $22,620
• Actual machine-hours worked: 1,600 hours
• Variable overhead rate variance: $3,420 Unfavorable
• Total variable overhead spending variance: $4,620 Unfavorable
The variable overhead efficiency variance for July is:
$8,040 Unfavorable
$8,040 Favorable
$1,200 Unfavorable
$1,200 Favorable