Asked by Praveeni Sooriyamudali on Jul 05, 2024
Verified
The standard variable overhead rate per machine setup is:
A) $20.00
B) $21.30
C) $18.44
D) $21.00
Standard Variable Overhead Rate
A predetermined rate used to allocate variable overhead costs to the cost of producing goods or services.
Machine Setup
The process of preparing and adjusting machines and equipment for a specific production run or job order.
- Calculate standard variable overhead rates.
Verified Answer
SC
Sosso ChannelJul 11, 2024
Final Answer :
D
Explanation :
AH × AR = $70,000
Total variable overhead spending variance = (AH × AR)- (SH × SR)
$4,550 F = $70,000 - (3,550 setups × SR)
-$4,550 = $70,000 - (3,550 setups × SR)
3,550 setups × SR = $70,000 + $4,550
3,550 setups × SR = $74,550
SR = $74,550 ÷ 3,550 setups
SR = $21 per setup
Total variable overhead spending variance = (AH × AR)- (SH × SR)
$4,550 F = $70,000 - (3,550 setups × SR)
-$4,550 = $70,000 - (3,550 setups × SR)
3,550 setups × SR = $70,000 + $4,550
3,550 setups × SR = $74,550
SR = $74,550 ÷ 3,550 setups
SR = $21 per setup
Learning Objectives
- Calculate standard variable overhead rates.