**I need to know HOW TO SOLVE this. Thanks Jarvey Corporation has a standard cos

Question

**I need to know HOW TO SOLVE this. Thanks

Jarvey Corporation has a standard cost system in which it applies manufacturing overhead to products on the basis of standard machine-hours (MHs). The company has provided the following data for the most recent month:
Budgeted level of activity (MHs) 6,100
Actual level of activity (MHs) 6,300
Cost formula for variable overhead cost (per MH) $6.70
Budgeted fixed manufacturing overhead cost $42,000
Actual total variable overhead $41,580
Actual total fixed manufacturing overhead $45,000

What was the variable overhead rate variance for the month?

Explanation / Answer

AH (AR - SR) = 1,600 ($14.00 - $14.30) = $480

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