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?
A) $2,724 U
B) $3,492 U
C) $840 F
D) $768 U

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?
A) $2,724 U 
B) $3,492 U 
C) $840 F 
D) $768 U

Quizplus · Accepted Answer

Variable overhead rate variance = (AH × AR) - (AH × SR)
= $40,740 - (2,100 hours × $19.80 per hour)
= $40,740 - $41,580
= $840 F

The Following Standards for Variable Manufacturing Overhead Have Been Established