Marten Corporation makes a product with the following standards for direct labor and variable overhead: In May the company produced 2,800 units using 300 direct labor-hours. The actual variable overhead cost was $1,620. The company applies variable overhead on the basis of direct labor-hours.
-The variable overhead rate variance for May is:
A)$112 U
B)$112 F
C)$120 F
D)$120 U

Question

Marten Corporation makes a product with the following standards for direct labor and variable overhead:  In May the company produced 2,800 units using 300 direct labor-hours. The actual variable overhead cost was $1,620. The company applies variable overhead on the basis of direct labor-hours.
-The variable overhead rate variance for May is:
A)$112 U 
B)$112 F 
C)$120 F 
D)$120 U

Quizplus · Accepted Answer

Variable overhead rate variance = (AH F1F1F1S1F1F1F10 AR)- (AH F1F1F1S1F1F1F10 SR)
= $1,620 - (300 hours F1F1F1S1F1F1F10 $5.00 per hour)
= $1,620 - $1,500 = $120 U

Marten Corporation Makes a Product with the Following Standards for Direct