Cabot Company collected the following data regarding production of one of its products. Compute the variable overhead cost variance.
A) $18,000 favorable.
B) $4,000 favorable.
C) $18,000 unfavorable.
D) $18,300 favorable.
E) $14,300 unfavorable.

Question

Quizplus · Accepted Answer

The variable overhead cost variance is calculated by comparing the actual variable overhead costs to the standard variable overhead costs for the actual production level. The $4,000 favorable variance indicates that the actual costs were $4,000 less than the standard costs.

Cabot Company Collected the Following Data Regarding Production of One