Please show work to get credit :-) $884 U $884 F $940 U $940 F Landram Corporati

Question

Please show work to get credit :-)

$884 U $884 F $940 U $940 F Landram Corporation makes a product with the following standard costs: In March the company produced 4,700 units using 10,230 kilos of the direct material and 2,210 direct labor-hours. During the month, the company purchased 10,800 kilos of the direct material at a cost of $76,680. The actual direct labor cost was $38,233 and the actual variable overhead cost was $11,934. The company applies variable overhead on the basis of direct labor-hours. The direct materials purchases variance is computed when the materials are purchased. The variable overhead rate variance for March is:

Explanation / Answer

Actual variable overhead cost = $11,934

Actual labor hours = 2,210 hours

Actual variable overhead rate = $11,934/2,210 = $5.40

Variable overhead rate variance = (Standard variable overhead rate - Actual variable overhead rate )* Actual labor hours worked

=($5.00 - $5.40)*2,210

=$884 unfavorable

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