(Appendix 11A)A manufacturing company uses a standard costing system in which standard machine-hours (MHs)is the measure of activity.Data from the company's flexible budget for manufacturing overhead are given below: The following data pertain to operations for the most recent period: The variable overhead rate variance for the period was closest to:
A)$315 U
B)$1, 465 F
C)$1, 465 U
D)$315 F

Question

(Appendix 11A)A manufacturing company uses a standard costing system in which standard machine-hours (MHs)is the measure of activity.Data from the company's flexible budget for manufacturing overhead are given below:  The following data pertain to operations for the most recent period:  The variable overhead rate variance for the period was closest to:
A)$315 U 
B)$1, 465 F 
C)$1, 465 U 
D)$315 F

Quizplus · Accepted Answer

SR = $35, 075 ÷ 6, 100 MHs = $5.75 per MH
AH × AR = $36, 540
Labor rate variance = (AH × AR)- (AH × SR)
= $36, 540 - (6, 300 MHs × $5.75 per MH)
= $36, 540 - $36, 225
= $315 U

(Appendix 11A)A Manufacturing Company Uses a Standard Costing System in Which