Brummer Corporation makes a product whose variable overhead standards are based on direct labor-hours. The quantity standard is 0.1 hours per unit. The variable overhead rate standard is $8.00 per hour. In January the company produced 8,700 units using 910 direct labor-hours. The actual variable overhead rate was $7.90 per hour. The variable overhead rate variance for January is:
A) $91 F
B) $87 F
C) $91 U
D) $87 U

Question

Quizplus · Accepted Answer

Variable overhead rate variance = AH × (AR − SR)
= 910 hours × ($7.90 per hour − $8.00 per hour)
= 910 hours × (−$0.10 per hour)
= $91 F

Brummer Corporation Makes a Product Whose Variable Overhead Standards Are