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 supplies is closest to:
A) $640 F
B) $1,387 F
C) $1,387 U
D) $747 F

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 supplies is closest to:
A) $640 F 
B) $1,387 F 
C) $1,387 U 
D) $747 F

Quizplus · Accepted Answer

AH × AR = $98,933
Variable overhead rate variance = (AH × AR) − (AH × SR)
= ($98,933) − (49,840 hours × $2.00 per hour)
= $98,933 − $99,680
= $747 F

The Following Data Have Been Provided by Liggett Corporation