Snuggs Corporation makes a product with the following standard costs: The company reported the following results concerning this product in October. 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 October is:
A)$33 F
B)$35 U
C)$35 F
D)$33 U

Question

Snuggs Corporation makes a product with the following standard costs:  The company reported the following results concerning this product in October.  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 October is:
A)$33 F 
B)$35 U 
C)$35 F 
D)$33 U

Quizplus · Accepted Answer

Variable overhead rate variance = AH(AR - SR)
= 350 hours ($4.10 per hour - $4.00 per hour)
= 350 hours ($0.10 per hour)= $35 U

Snuggs Corporation Makes a Product with the Following Standard Costs