The following standards for variable manufacturing overhead have been established for a company that makes only one product: The following data pertain to operations for the last month: What is the variable overhead rate variance for the month?
A)$2,724 U
B)$3,492 U
C)$840 F
D)$768 U

Question

The following standards for variable manufacturing overhead have been established for a company that makes only one product:  The following data pertain to operations for the last month:  What is the variable overhead rate variance for the month?
A)$2,724 U 
B)$3,492 U 
C)$840 F 
D)$768 U

Quizplus · Accepted Answer

Variable overhead rate variance = (AH × AR)- (AH × SR)
= $40,740 - (2,100 hours × $19.80 per hour)
= $40,740 - $41,580
= $840 F

The Following Standards for Variable Manufacturing Overhead Have Been Established