Leshem Incorporated makes a single product--an electrical motor used in many long-haul trucks.The company has a standard cost system in which it applies overhead to this product based on the standard machine-hours allowed for the actual output of the period.Data concerning the most recent year appear below: The variable overhead rate variance is:
A)$9,184 U
B)$8,528 F
C)$9,184 F
D)$8,528 U

Question

Leshem Incorporated makes a single product--an electrical motor used in many long-haul trucks.The company has a standard cost system in which it applies overhead to this product based on the standard machine-hours allowed for the actual output of the period.Data concerning the most recent year appear below:  The variable overhead rate variance is:
A)$9,184 U 
B)$8,528 F 
C)$9,184 F 
D)$8,528 U

Quizplus · Accepted Answer

Variable component of the predetermined overhead rate (SR)= $52,920/14,000 machine-hours
= $3.78 per machine-hour
Variable overhead rate variance = (AH × AR)- (AH × SR)
= ($30,784)- (10,400 machine-hours × $3.78 per machine-hour)
= ($30,784)- ($39,312)
= $8,528 F
Reference: APP10A-Ref1
(Appendix 9A)Wineman Incorporated makes a single product--an electrical motor used in many long-haul trucks.The company has a standard cost system in which it applies overhead to this product based on the standard machine-hours allowed for the actual output of the period.Data concerning the most recent year appear below: 11ea7998_5d52_0e6e_911b_8736ff5c2938_TB2627_00_TB2627_00

Leshem Incorporated Makes a Single Product--An Electrical Motor Used in Many