Asked by Tommy Dorfman on May 07, 2024
Verified
What is the variable overhead rate variance for the month?
A) $3,010 F
B) $3,010 U
C) $10,435 U
D) $10,435 F
Variable Overhead Rate Variance
The difference between the actual variable overhead incurred and the expected (or standard) costs based on the predetermined overhead rate.
Month
A unit of time, roughly based on the period of the lunar cycle, used in calendars to divide the year.
- Digest the basics of variable overhead variances and the technique for their calculation.
Verified Answer
BH
Brandon HerreraMay 13, 2024
Final Answer :
B
Explanation :
Variable overhead rate variance = (Actual hours worked x Actual variable overhead rate) - (Actual hours worked x Standard variable overhead rate)
= (11,250 x $0.30) - (11,250 x $0.25)
= $3,010 U (unfavorable as actual variable overhead rate is higher than the standard)
= (11,250 x $0.30) - (11,250 x $0.25)
= $3,010 U (unfavorable as actual variable overhead rate is higher than the standard)
Explanation :
AH × AR = $130,720
Variable overhead rate variance = (AH × AR)− (AH × SR)
= ($130,720)− (8,600 hours × $14.85 per hour)
= $130,720 − $127,710
= $3,010 U
Variable overhead rate variance = (AH × AR)− (AH × SR)
= ($130,720)− (8,600 hours × $14.85 per hour)
= $130,720 − $127,710
= $3,010 U
Learning Objectives
- Digest the basics of variable overhead variances and the technique for their calculation.
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