A manufacturing company that has only one product has established the following standards for its variable manufacturing overhead. The company bases its variable manufacturing overhead standards on direct labor-hours.
The following data pertain to operations for the last month:

-The variable overhead rate variance for January is:
A) $91 F
B) $87 F
C) $91 U
D) $87 U

Question

A manufacturing company that has only one product has established the following standards for its variable manufacturing overhead. The company bases its variable manufacturing overhead standards on direct labor-hours.
  The following data pertain to operations for the last month:
 
-The variable overhead rate variance for January is:
A) $91 F 
B) $87 F 
C) $91 U 
D) $87 U

Quizplus · Accepted Answer

Variable overhead rate variance = AH × (AR − SR)
= 910 hours × ($7.90 per hour − $8.00 per hour)
= 910 hours × (−$0.10 per hour)
= $91 F

A Manufacturing Company That Has Only One Product Has Established