The variable overhead efficiency variance is $850 unfavourable.
The variable manufacturing efficiency variance can be calculated as follows:
Variable manufacturing efficiency variance:
= (Actual hours − Standard hours) × Standard rate = (31,140 − 30,800) × $ 2.50 per hour
= 340 × $ 2.50 per hour
= $ 850 Unfavorable
the inconsistent manufacturing efficiency
The $850 unfavourable variance demonstrates that the outcomes fell short of expectations. A variation occurs when the actual cost or revenue is different from the expected or typical amount. Variations help implement corrective actions.
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