The following data have been provided by Liggett Corporation: Lubricants and supplies are both elements of variable manufacturing overhead.
The variable overhead rate variance for lubricants is closest to:
A) $1,120 F
B) $5,381 F
C) $4,261 U
D) $5,381 U

Question

The following data have been provided by Liggett Corporation:  Lubricants and supplies are both elements of variable manufacturing overhead.
The variable overhead rate variance for lubricants is closest to:
A) $1,120 F 
B) $5,381 F 
C) $4,261 U 
D) $5,381 U

Quizplus · Accepted Answer

AH × AR = $179,821
Variable overhead rate variance = (AH × AR) − (AH × SR)
= ($179,821) − (49,840 hours × $3.50 per hour)
= $179,821 − $174,440
= $5,381 U

The Following Data Have Been Provided by Liggett Corporation