Zacher Corporation makes a product with the following standards for direct labor and variable overhead: In February the company's budgeted production was 6,900 units,but the actual production was 7,000 units.The company used 1,980 direct labor-hours to produce this output.The actual variable overhead cost was $10,296.The company applies variable overhead on the basis of direct labor-hours. The variable overhead rate variance for February is:

Question

Zacher Corporation makes a product with the following standards for direct labor and variable overhead:  In February the company's budgeted production was 6,900 units,but the actual production was 7,000 units.The company used 1,980 direct labor-hours to produce this output.The actual variable overhead cost was $10,296.The company applies variable overhead on the basis of direct labor-hours. The variable overhead rate variance for February is:

Quizplus · Accepted Answer

AH × AR = $10,296
Variable overhead rate variance = (AH × AR)- (AH × SR)
= ($10,296)- (1,980 hours × $5.00 per hour)
= $10,296 - $9,900
= $396 U

Zacher Corporation Makes a Product with the Following Standards for Direct