Majer Corporation makes a product with the following standard costs: The company reported the following results concerning this product in February.
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 February is:
A) $191 U
B) $191 F
C) $196 U
D) $196 F

Question

Majer Corporation makes a product with the following standard costs:  The company reported the following results concerning this product in February.
 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 February is:
A) $191 U 
B) $191 F 
C) $196 U 
D) $196 F

Quizplus · Accepted Answer

Variable overhead rate variance = AH × (AR − SR)
= 1,910 hours × ($4.90 per hour − $5.00 per hour)
= 1,910 hours × (−$0.10 per hour)
= $191 F

Majer Corporation Makes a Product with the Following Standard Costs