Mazzo Corporation makes a product with the following standards for direct labor and variable overhead: In February the company's budgeted production was 5,000 units, but the actual production was 5,100 units. The company used 2,090 direct labor-hours to produce this output. The actual variable overhead cost was $6,688. The company applies variable overhead on the basis of direct labor-hours.
-The variable overhead rate variance for February is:
A)$408 U
B)$418 F
C)$418 U
D)$408 F

Question

Mazzo Corporation makes a product with the following standards for direct labor and variable overhead:  In February the company's budgeted production was 5,000 units, but the actual production was 5,100 units. The company used 2,090 direct labor-hours to produce this output. The actual variable overhead cost was $6,688. The company applies variable overhead on the basis of direct labor-hours.
-The variable overhead rate variance for February is:
A)$408 U 
B)$418 F 
C)$418 U 
D)$408 F

Quizplus · Accepted Answer

Variable overhead rate variance = (AH F1F1F1S1F1F1F10 AR)- (AH F1F1F1S1F1F1F10 SR)
= $6,688 - (2,090 hours F1F1F1S1F1F1F10 $3.00 per hour)
= $6,688 - $6,270 = $418 U

Mazzo Corporation Makes a Product with the Following Standards for Direct