Bulluck Corporation makes a product with the following standard costs Standard Q

Question

Bulluck Corporation makes a product with the following standard costs Standard Quantity or Direct materials Direct labor Variable overhead 3.5 grams 8.7 hours e.7 hours $ 1.00 per gram $11.00 per hour 2.00 per hour The company reported the following results concerning this product in July Actual output Raw materials used in production Actual direct labor-hours Purchases of raw materials Actual price of raw materials purchased Actual direct labor rate Actual variable overhead rate 3,000 units 11,37e grams 1,910 hours 12,100 grams $ 1.20 per gram s 11.40 per hour $ 2.10 per hour The company applies variable overhead on the basis of direct labor-hours. The direct materials purchases variance is computed when the ma The variable overhead rate variance for July is:

Explanation / Answer

Overhead Variance Variable Overhead Standard recovery rate                                                                           2.00 Actual hours 1910 Actual recovery rate                                                                           2.10 Variable overhead rate variance = (Standard rate - Actual rate) * Actual usage Variable overhead rate variance = (2.00 - 2.10) * 1910 Variable overhead rate variance                                                                           (191) adverse

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