Lafountaine Manufacturing Corporation has a standard cost system in which it applies manufacturing overhead to products on the basis of standard machine-hours (MHs).The company's cost formula for variable manufacturing overhead is $4.70 per MH.During the month,the actual total variable manufacturing overhead was $20,210 and the actual level of activity for the period was 4,700 MHs.What was the variable overhead rate variance for the month?
A)$400 unfavorable
B)$1,880 favorable
C)$1,880 unfavorable
D)$400 favorable

Question

Quizplus · Accepted Answer

Variable overhead rate variance = AH (AR - SR)= AH F1F1F1S1F1F1F10 AR - AH F1F1F1S1F1F1F10 SR
= $20,210 - (4,700 hours F1F1F1S1F1F1F10 $4.70 per hour)
= $20,210 - $22,090 = $1,880 F

Lafountaine Manufacturing Corporation Has a Standard Cost System in Which