Ledezma Corporation makes a product with the following standards for direct labor and variable overhead: In May the company produced 2, 500 units using 1, 210 direct labor-hours.The actual variable overhead cost was $9, 922.The company applies variable overhead on the basis of direct labor-hours. The variable overhead rate variance for May is:

Question

Ledezma Corporation makes a product with the following standards for direct labor and variable overhead:  In May the company produced 2, 500 units using 1, 210 direct labor-hours.The actual variable overhead cost was $9, 922.The company applies variable overhead on the basis of direct labor-hours. The variable overhead rate variance for May is:

Quizplus · Accepted Answer

AH × AR = $9, 922
Variable overhead rate variance = (AH × AR)- (AH × SR)
= ($9, 922)- (1, 210 hours × $8.00 per hour)
= $9, 922 - $9, 680
= $242 U

Ledezma Corporation Makes a Product with the Following Standards for Direct