Answer the following questions using the information below:
Hobart Corporation manufactured 20 000 heaters during November.The overhead cost-allocation base is $15.75 per machine-hour.The following variable overhead data pertain to November:
$$\begin{array} { l r r }
& \text { Actual } & \text { Budgeted } \
\text { Production } & 20000 \text { units } & 22000 \text { units } \
\text { Machine-hours } & 7875 \text { hours } & 9000 \text { hours } \
\text { Variable overhead cost per machine-hour: } & \$ 15.50 & \$ 15.75
\end{array}$$
-What is the total variable overhead variance?
A)$1968.75 favourable
B)$6801.14 unfavourable
C)$6801.14 favourable
D)$1968.75 unfavourable

Question

Answer the following questions using the information below:
Hobart Corporation manufactured 20 000 heaters during November.The overhead cost-allocation base is $15.75 per machine-hour.The following variable overhead data pertain to November:
 $$\begin{array} { l r r } 
& \text { Actual } & \text { Budgeted } \
\text { Production } & 20000 \text { units } & 22000 \text { units } \
\text { Machine-hours } & 7875 \text { hours } & 9000 \text { hours } \
\text { Variable overhead cost per machine-hour: } & \$ 15.50 & \$ 15.75
\end{array}$$
-What is the total variable overhead variance?
A)$1968.75 favourable
B)$6801.14 unfavourable
C)$6801.14 favourable
D)$1968.75 unfavourable

Quizplus · Accepted Answer

The total variable overhead variance is the difference between the actual variable overhead cost and the budgeted variable overhead cost. The actual variable overhead cost is $15.50 per machine-hour * 7875 machine-hours = $122,312.50. The budgeted variable overhead cost is $15.75 per machine-hour * 9000 machine-hours = $141,750.00. Therefore, the total variable overhead variance is $141,750.00 - $122,312.50 = $19,437.50 favourable.

Answer the Following Questions Using the Information Below: Hobart Corporation

Answer the Following Questions Using the Information Below:
Hobart Corporation