Suski Corporation has a standard cost system in which it applies manufacturing overhead to products on the basis of standard machine-hours (MHs).The company has provided the following data for the most recent month: What was the variable overhead rate variance for the month?

Question

Suski Corporation has a standard cost system in which it applies manufacturing overhead to products on the basis of standard machine-hours (MHs).The company has provided the following data for the most recent month:  What was the variable overhead rate variance for the month?

Quizplus · Accepted Answer

Variable overhead rate variance = (AH × AR)- (AH × SR)
= $42,750 - (7,500 hours × $5.90 per hour)
= $42,750 - $44,250
= $1,500 F

Suski Corporation Has a Standard Cost System in Which It