A manufacturing company that has only one product has established the following

Question

A manufacturing company that has only one product has established the following standards for its variable manufacturing overhead. The company bases its variable manufacturing overhead standards on direct labor hours Standard hours per unit of output 3.40 DUHs Standard variable overhead rate $10.75 per DLH The following data pertain to operations for the last month: Actual direct labor-hours Actual total variable manufacturing overhead cost Actual output 9,200 DLHs $95,800 2,580 units What is the variable overhead rate variance for the month? Mutiple Choice $3100 U $3.3810

Explanation / Answer

BUDGETED (1 UNIT) STANDARD (2500 UNITS) ACTUAL (2500 UNITS) UNITS PRICE AMOUNT UNITS PRICE AMOUNT UNITS PRICE AMOUNT 3.4 10.75 36.55 8500 10.75 91375 9200 10.41304 95800 (2500 * 3.4) Variable overhead Rate variance = (Standard price -Actual Price) * Actual Units (10.75 - 10.41304) *9200 3100 Favourable Ans 3100 F

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