Bonnie Company has a direct labor standard of 15 hours per unit of output.Each employee has a standard wage rate of $14 per hour.The standard variable overhead rate is $10 per hour.During March,employees worked 13,100 hours.The direct labor rate variance was $9,170 favorable,the variable overhead rate variance was $13,100 unfavorable,and the direct labor efficiency variance was $15,400 unfavorable.What is the actual variable overhead?
A)$117,900
B)$131,000
C)$144,100
D)$183,400

Question

Quizplus · Accepted Answer

The actual variable overhead can be calculated by adding the variable overhead rate variance to the standard variable overhead cost. The standard variable overhead cost is calculated as the actual hours worked multiplied by the standard variable overhead rate. Given that the actual hours worked are 13,100 and the standard variable overhead rate is $10 per hour, the standard variable overhead cost is 13,100 hours * $10/hour = $131,000. The variable overhead rate variance is given as $13,100 unfavorable, which means the actual variable overhead is higher than the standard by this amount. Therefore, the actual variable overhead is $131,000 + $13,100 = $144,100.

Bonnie Company Has a Direct Labor Standard of 15 Hours