Hurren Corporation makes a product with the following standard costs: The company reported the following results concerning this product in June. 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 June is:
A)$1,365 U
B)$1,365 F
C)$1,350 F
D)$1,350 U

Question

Hurren Corporation makes a product with the following standard costs:  The company reported the following results concerning this product in June.  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 June is:
A)$1,365 U 
B)$1,365 F 
C)$1,350 F 
D)$1,350 U

Quizplus · Accepted Answer

Variable overhead rate variance = AH(AR - SR)
= 4,500 hours ($3.70 per hour - $4.00 per hour)
= 4,500 hours (-$0.30 per hour)= $1,350 F

Hurren Corporation Makes a Product with the Following Standard Costs