Grant Co.uses the following standard to produce a single unit of its product: Variable overhead (2 hrs.per unit @ $4/hr. )Actual data for the month show total variable overhead costs of $190,000,and 23,000 units produced.The total variable overhead variance is:
A)$6,000F.
B)$6,000U.
C)$78,000U.
D)$78,000F.
E)$0.

Question

Quizplus · Accepted Answer

The standard cost for variable overhead is 2 hours per unit at $4 per hour, which equals $8 per unit. For 23,000 units, the standard cost should be 23,000 units * $8 = $184,000. The actual cost is $190,000, resulting in a variance of $190,000 - $184,000 = $6,000 unfavorable (U).

Grant Couses the Following Standard to Produce a Single Unit of of Its