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