Answer (A) is correct . The variable overhead efficiency variance equals the standard price ($8 an hour) times the difference between the actual hours and the standard hours allowed for the actual output. Thus, the variance is $48,000 unfavorable {[(22,000 units produced × 4 standard hours per unit) – 94,000 actual hours] × $8}.
Answer (B) is incorrect because The variable overhead spending variance calculated based on capacity, not actual hours, is $60,000 favorable.
Answer (C) is incorrect because The variance of $96,000 unfavorable is based on the difference between standard hours allowed for the actual output and capacity hours.
Answer (D) is incorrect because The excess of actual direct labor costs over actual variable overhead costs is $200,000 unfavorable.
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Water Control’s variable overhead efficiency variance for November was
