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

Question

Bulluck Corporation makes a product with the following standard costs: Standard Quantity or Hours Standard Price or Rate Direct materials 3.5 grams $ 1.00 per gram Direct labor 0.7 hours $ 11.00 per hour Variable overhead 0.7 hours $ 2.00 per hour The company reported the following results concerning this product in July. Actual output 3,000 units Raw materials used in production 11,370 grams Actual direct labor-hours 1,910 hours Purchases of raw materials 12,100 grams Actual price of raw materials purchased $ 1.20 per gram Actual direct labor rate $ 11.40 per hour Actual variable overhead rate $ 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 materials are purchased. The variable overhead rate variance for July is: Multiple Choice

$210 U

$191 U

$210 F

$191 F

Explanation / Answer

Variable overhead rate variance (Actual rate - standard rate)*Actual hours (2.10 - 2.00)*1,910 191 U Answer 191 U

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