Kronstedt 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)$710 unfavorable
B)$1,340 unfavorable
C)$630 favorable
D)$3,000 unfavorable

Question

Kronstedt 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)$710 unfavorable 
B)$1,340 unfavorable 
C)$630 favorable 
D)$3,000 unfavorable

Quizplus · Accepted Answer

AR = $41,580 F1F1F1S1F1F1F10 6,300 = $6.60
Variable overhead rate variance = AH (AR - SR)
= 6,300 ($6.60 - $6.70) = $630 F

Kronstedt Corporation Has a Standard Cost System in Which It