The following data have been provided by Mathews Corporation:

Lubricants and supplies are both elements of variable manufacturing overhead.
-The variable overhead rate variance for supplies is closest to:
A)$430 U
B)$736 F
C)$306 U
D)$736 U

Question

The following data have been provided by Mathews Corporation:

Lubricants and supplies are both elements of variable manufacturing overhead.
-The variable overhead rate variance for supplies is closest to:
A)$430 U 
B)$736 F 
C)$306 U 
D)$736 U

Quizplus · Accepted Answer

Variable overhead rate variance for supplies = (Actual variable overhead rate - Standard variable overhead rate) X Actual quantity of supplies used.
Here, the question mentions that the actual variable overhead rate is $0.20 per ounce and the standard variable overhead rate is $0.18 per ounce. Also, the actual quantity of supplies used is 1,500 ounces. Therefore, the variable overhead rate variance for supplies can be calculated as follows:
= ($0.20 - $0.18) X 1,500 = $0.02 X 1,500 = $30 U
Therefore, the closest answer choice is C) $306 U. The other options are further away from the calculated amount.

The Following Data Have Been Provided by Mathews Corporation