Lazy Guy Corporation manufactured 4,000 chairs during June. The following variable overhead data relates to June:

What is the variable overhead flexible-budget variance?
A) $2,200 favorable
B) $1,480 favorable
C) $2,200 unfavorable
D) $1,480 unfavorable

Question

Lazy Guy Corporation manufactured 4,000 chairs during June. The following variable overhead data relates to June:

What is the variable overhead flexible-budget variance?
A) $2,200 favorable 
B) $1,480 favorable 
C) $2,200 unfavorable 
D) $1,480 unfavorable

Quizplus · Accepted Answer

Variable overhead flexible-budget variance = (Actual hours - Budgeted hours) x Variable overhead rate per hour
= (7,500 - 6,400) x $0.30
= $3300 unfavorable
Therefore, the answer is C, $2,200 unfavorable.

Lazy Guy Corporation Manufactured 4,000 Chairs During June