Can You Calculate The Variable Overhead Efficiency Variance?

Overhead is what it cost to transact business, rents, administrative salaries, insurance. Expenses that do not directly related to the production of the product or service but are necessary in order to produce the product or service.

Overhead cost means your product in what it cost you to make it wages,electic, gas,rent etc you would need to take these into account and work out how much your product was and add on a percentage to make a profit

Casey Corporation produces a special line of basketball hoops. Casey Corporation produces the hoops in batches. To manufacture a batch of the basketball hoops, Casey Corporation must set up the machines and molds. Setup costs are batch-level costs because they are associated with batches rather than individual units of products. A separate Setup Department is responsible for setting up machines and molds for different styles of basketball hoops.

Setup overhead costs consist of some costs that are variable and some costs that are fixed with respect to the number of setup-hours. The following information pertains to January 2007.

Static-budget
Amounts Actual
Amounts
Basketball hoops produced and sold 30,000 28,000
Batch size (number of units per batch) 200 250

Setup-hours per batch 5 4
Variable overhead cost per setup hour $10 $9

Total fixed setup overhead costs $22,500 $21,000

Can you calculate Variable Overhead Efficiency variance
Practical volume - 288000
Standard rate is 2 direct labor hours
Actual - 570,000 @ $9
Budgeted overhead is $3,168,000 with $864,000 fixed overhead
Actual fixed overhead - $872,000
Actual Variable overhead $2,320,000
Units produced 280,000

570000*2-288000*2=
1744000