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) $3,010 F
B) $3,010 U
C) $10,435 U
D) $10,435 F

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) $3,010 F 
B) $3,010 U 
C) $10,435 U 
D) $10,435 F

Quizplus · Accepted Answer

AH × AR = $130,720
Variable overhead rate variance = (AH × AR) − (AH × SR)
= ($130,720) − (8,600 hours × $14.85 per hour)
= $130,720 − $127,710
= $3,010 U

The Following Standards for Variable Manufacturing Overhead Have Been Established