The following standards for variable manufacturing overhead have been established for a company that makes only one product: The following data pertain to operations for the last month: What is the variable overhead rate variance for the month?

Question

The following standards for variable manufacturing overhead have been established for a company that makes only one product:  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 = $58,310
Variable overhead rate variance = (AH × AR)- (AH × SR)
= ($58,310)- (4,900 hours × $11.55 per hour)
= $58,310 - $56,595
= $1,715 U

The Following Standards for Variable Manufacturing Overhead Have Been Established