A manufacturing company that has only one product has established the following standards for its variable manufacturing overhead.Variable manufacturing overhead standards are based on machine-hours. The following data pertain to operations for the last month: What is the variable overhead rate variance for the month?

Question

A manufacturing company that has only one product has established the following standards for its variable manufacturing overhead.Variable manufacturing overhead standards are based on machine-hours.  The following data pertain to operations for the last month:  What is the variable overhead rate variance for the month?

Quizplus · Accepted Answer

AH × AR = $24, 905
Variable overhead rate variance = (AH × AR)- (AH × SR)
= ($24, 905)- (1, 700 hours × $14.30 per hour)
= $24, 905 - $24, 310
= $595 U

A Manufacturing Company That Has Only One Product Has Established