Berends Corporation makes a product with the following standard costs:

The company reported the following results concerning this product in April.

The company applies variable overhead on the basis of direct labor-hours. The direct materials purchases variance is computed when the materials are purchased.
-The variable overhead rate variance for April is:
A)$792 F
B)$792 U
C)$768 F
D)$768 U

Question

Berends Corporation makes a product with the following standard costs:

The company reported the following results concerning this product in April.

The company applies variable overhead on the basis of direct labor-hours. The direct materials purchases variance is computed when the materials are purchased.
-The variable overhead rate variance for April is:
A)$792 F 
B)$792 U 
C)$768 F 
D)$768 U

Quizplus · Accepted Answer

The variable overhead rate variance is calculated as:
Actual variable overhead - (Actual hours worked x Standard variable overhead rate)
= $39,264 - (4,800 x $8)
= $39,264 - $38,496
= $768 F

Therefore, the correct answer is C, $768 F.

Berends Corporation Makes a Product with the Following Standard Costs