Reference no: EM132541862

A company has the following information about its direct labour and variable overheads:

Budgeted direct labour cost per unit of production (4h * $6/h) $24

Budgeted variable overhead per unit of production (4h * $2/h) $8

(variable overhead is assumed to be incurred per direct labour hour worked)

Question 1: If the company produces 1000 units of output, and the direct labour efficiency variance is $3000 adverse, what is the variable overhead efficiency variance?

Option a) $1000 favourable

Option b) $9000 favourable

Option c) $1000 adverse

Option d) $9000 adverse