EXERCISE 10-15 (CONTINUED) ALTERNATIVE SOLUTION

1, - SOLUTIONS TO QUESTION MANAGERIAL ACCOUNTING CH10 STANDARD COST AND THE BALANCE SCORECARD 1, - SOLUTIONS TO QUESTION MANAGERIAL ACCOUNTING CH10 STANDARD COST AND THE BALANCE SCORECARD
SOLUTIONS TO QUESTION MANAGERIAL ACCOUNTING CH10 STANDARD COST AND THE BALANCE SCORECARD
1,150 hours ($6.80 per hour* – $6.00 per hour) = $920 U *$7,820 ÷ 1,150 hours = $6.80 per hour Variable overhead efficiency variance = SR (AH – SH) $6.00 per hour (1,150 hours – 900 hours) = $1,500 U Yes, the two variances are closely related. Both are computed by com-paring actual labor time to the standard hours allowed for the output of the period. Thus, if the labor efficiency variance is favorable (or unfa-vorable), then the variable overhead efficiency variance will also be fa-vorable (or unfavorable). Problem 10-17 (45 minutes)