Valera Corporation makes a product with the following standards for labor and variable overhead: The company budgeted for production of 5,300 units in July, but actual production was 5,400 units. The company used 2,130 direct labor-hours to produce this output. The actual variable overhead rate was $6.10 per hour. The company applies variable overhead on the basis of direct labor-hours.The variable overhead rate variance for July is:
A) $213 Favorable
B) $216 Favorable
C) $216 Unfavorable
D) $213 Unfavorable

Question

Valera Corporation makes a product with the following standards for labor and variable overhead:  The company budgeted for production of 5,300 units in July, but actual production was 5,400 units. The company used 2,130 direct labor-hours to produce this output. The actual variable overhead rate was $6.10 per hour. The company applies variable overhead on the basis of direct labor-hours.The variable overhead rate variance for July is:
A) $213 Favorable 
B) $216 Favorable 
C) $216 Unfavorable 
D) $213 Unfavorable

Quizplus · Accepted Answer

The Answer of Valera Corporation makes a product with the following standards for labor and variable overhead:  The company budgeted for production of 5,300 units in July, but actual production was 5,400 units. The company used 2,130 direct labor-hours to produce this output. The actual variable overhead rate was $6.10 per hour. The company applies variable overhead on the basis of direct labor-hours.The variable overhead rate variance for July is:
A) $213 Favorable 
B) $216 Favorable 
C) $216 Unfavorable 
D) $213 Unfavorable

Valera Corporation Makes a Product with the Following Standards for Labor