The following standards for variable manufacturing overhead have been established for a company that makes only one product: The following data pertain to operations for the last month: What is the variable overhead rate variance for the month?

Question

The following standards for variable manufacturing overhead have been established for a company that makes only one product:  The following data pertain to operations for the last month:  What is the variable overhead rate variance for the month?

Quizplus · Accepted Answer

Variable overhead rate variance = (AH × AR)- (AH × SR)
= $31,330 - (2,600 hours × $12.00 per hour)
= $31,330 - $31,200
= $130 U

The Following Standards for Variable Manufacturing Overhead Have Been Established