The following data for the Pull Company pertain to the production of 3,000 clay pigeons during September: Standard variable overhead cost was $5.00 per pound of clay. Total actual variable overhead cost was $11,200.
Standard variable overhead cost allowed for units produced was $12,000. Variable overhead efficiency variance was $340 unfavorable.
Is the variable overhead rate variance.
A) $1,140 favorable
B) $560 unfavorable
C) $800 unfavorable
D) $800 favorable

Question

Quizplus · Accepted Answer

The variable overhead rate variance is calculated as the difference between the actual variable overhead cost and the standard variable overhead cost allowed, adjusted for the efficiency variance. Here, the actual cost is $11,200, the standard cost allowed is $12,000, and the efficiency variance is $340 unfavorable. The rate variance is $12,000 - $11,200 - $340 = $1,140 favorable.

The Following Data for the Pull Company Pertain to the Production