Tharaldson Corporation makes a product with the following standard costs:
The company reported the following results concerning this product in June.
The company applies variable overhead on the basis of direct labor-hours. The direct materials purchases variance is computed when the materials are purchased.
-The variable overhead rate variance for June is:
A) $100 U
B) $112 U
C) $100 F
D) $112 F

Question

Tharaldson Corporation makes a product with the following standard costs:
  The company reported the following results concerning this product in June.
  The company applies variable overhead on the basis of direct labor-hours. The direct materials purchases variance is computed when the materials are purchased.
-The variable overhead rate variance for June is:
A) $100 U 
B) $112 U 
C) $100 F 
D) $112 F

Quizplus · Accepted Answer

AH × AR = $3,100
Variable overhead rate variance = (AH × AR) − (AH × SR)
= ($3,100) − (500 hours × $6.00 per hour)
= $3,100 − $3,000
= $100 U

Tharaldson Corporation Makes a Product with the Following Standard Costs