Millonzi 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?
A)$4,350 favorable
B)$2,000 unfavorable
C)$2,650 favorable
D)$1,700 favorable

Question

Millonzi 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?
A)$4,350 favorable 
B)$2,000 unfavorable 
C)$2,650 favorable 
D)$1,700 favorable

Quizplus · Accepted Answer

Variable overhead rate variance = AH (AR - SR)= AH F1F1F1S1F1F1F10 AR - AH F1F1F1S1F1F1F10 SR
= $42,400 - (5,300 hours F1F1F1S1F1F1F10 $8.50 per hour)
= $42,400 - $45,050 = $2,650 F

Millonzi Corporation Has a Standard Cost System in Which It