Harrangue Company's standard variable overhead rate is $6 per direct labor hour, and each unit requires 2 standard direct labor hours. During March, Harry recorded 6,000 actual direct labor hours, $37,000 actual variable overhead costs, and 2,900 units of product manufactured.
What is the total variable overhead variance for March for Harrangue?
A)$2,200 (U)
B)$600 (U)
C)$1,000 (U)
D)$1,200 (U)

Question

Quizplus · Accepted Answer

The total variable overhead variance is calculated as the difference between the actual variable overhead costs and the standard variable overhead costs for the actual production. The standard cost for the actual production is calculated as 2,900 units * 2 hours/unit * $6/hour = $34,800. The actual variable overhead costs are $37,000. Therefore, the variance is $37,000 - $34,800 = $2,200 unfavorable (U).

Harrangue Company's Standard Variable Overhead Rate Is $6 Per Direct