The problem asks for total rate and efficiency variance. I figured the rate variance to be $585U and cannot seem to figure out efficiency variance.
Standard
Direct Material 20 lbs @ $8 per bag
Direct Labor 0.1 hrs @ $1.10 per bag
Variable Overhead 0.1 hrs @ $0.40 per bag
No beginning inventories and variable overhead is applied to production on the basis of standard direct labor hours. During the month the company recorded the following activity...
Production: 4000 bags
Direct materials purchased: 85000 lbs at a cost of $32300
Direct labor worked : 390 hrs at a cost of $4875
Variable overhead incurred: $1475
Inventory of direct materials at end of month is 3000 lbs

For rate variance I used AH(AR-SR)
390(12.50-11) and got $585U

For efficiency variance I used SR(AH-SH)
11(390-400) and got -$110

Is this right or what am I doing wrong. Thanks