Viger 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) $2,000 Favorable
B) $720 Favorable
C) $1,260 Unfavorable
D) $1,980 Favorable

Question

Viger 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) $2,000 Favorable 
B) $720 Favorable 
C) $1,260 Unfavorable 
D) $1,980 Favorable

Quizplus · Accepted Answer

Variable overhead rate variance = (AH × AR) - (AH × SR)
= $60,390 - (9,900 hours × $6.30 per hour)
= $60,390 - $62,370
= $1,980 F

Viger Corporation Has a Standard Cost System in Which It