Eliezrie Corporation makes a product with the following standard costs: In January the company's budgeted production was 7,400 units but the actual production was 7,500 units. The company used 45,580 kilos of the direct material and 2,030 direct labor-hours to produce this output. During the month, the company purchased 48,500 kilos of the direct material at a cost of $53,350. The actual direct labor cost was $18,473 and the actual variable overhead cost was $7,714. 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 January is:
A)$406 F
B)$450 F
C)$406 U
D)$450 U

Question

Eliezrie Corporation makes a product with the following standard costs:  In January the company's budgeted production was 7,400 units but the actual production was 7,500 units. The company used 45,580 kilos of the direct material and 2,030 direct labor-hours to produce this output. During the month, the company purchased 48,500 kilos of the direct material at a cost of $53,350. The actual direct labor cost was $18,473 and the actual variable overhead cost was $7,714. 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 January is:
A)$406 F 
B)$450 F 
C)$406 U 
D)$450 U

Quizplus · Accepted Answer

The Answer of Eliezrie Corporation makes a product with the following standard costs:  In January the company's budgeted production was 7,400 units but the actual production was 7,500 units. The company used 45,580 kilos of the direct material and 2,030 direct labor-hours to produce this output. During the month, the company purchased 48,500 kilos of the direct material at a cost of $53,350. The actual direct labor cost was $18,473 and the actual variable overhead cost was $7,714. 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 January is:
A)$406 F 
B)$450 F 
C)$406 U 
D)$450 U

Eliezrie Corporation Makes a Product with the Following Standard Costs