Bulluck Corporation makes a product with the following standard costs: The company reported the following results concerning this product in July.
The company applies variable overhead on the basis of direct labor-hours. The direct materials purchases variance is computed when the materials are purchased.
The variable overhead rate variance for July is:
A) $191 U
B) $210 U
C) $210 F
D) $191 F

Question

Bulluck Corporation makes a product with the following standard costs:  The company reported the following results concerning this product in July.
 The company applies variable overhead on the basis of direct labor-hours. The direct materials purchases variance is computed when the materials are purchased.
The variable overhead rate variance for July is:
A) $191 U 
B) $210 U 
C) $210 F 
D) $191 F

Quizplus · Accepted Answer

Variable overhead rate variance = AH × (AR − SR)
= 1,910 hours × ($2.10 per hour − $2.00 per hour)
= 1,910 hours × ($0.10 per hour)
= $191 U

Bulluck Corporation Makes a Product with the Following Standard Costs