Asked by Soleil Castaneda on Jul 16, 2024
Verified
The variable overhead rate variance for July is:
A) $191 U
B) $210 U
C) $210 F
D) $191 F
Variable Overhead Rate Variance
The difference between the actual variable overhead incurred and the expected overhead based on standard rates.
- Understand the concept and calculation of variable overhead rate and efficiency variances.
Verified Answer
TS
Tiphany santanderJul 21, 2024
Final Answer :
A
Explanation :
Variable overhead rate variance = AH × (AR ? SR)
= 1,910 hours × ($2.10 per hour ? $2.00 per hour)
= 1,910 hours × ($0.10 per hour)
= $191 U
Reference: CH09-Ref44
Ravena Labs., Inc.makes a single product which has the following standards:
Direct materials: 2.5 ounces at $20 per ounce
Direct labor: 1.4 hours at $12.50 per hour
Variable manufacturing overhead: 1.4 hours at 3.50 per hour
Variable manufacturing overhead is applied on the basis of standard direct labor-hours.The following data are available for October:
• 3,750 units of compound were produced during the month.
• There was no beginning direct materials inventory.
• Direct materials purchased: 12,000 ounces for $225,000.
• The ending direct materials inventory was 2,000 ounces.
• Direct labor-hours worked: 5,600 hours at a cost of $67,200.
• Variable manufacturing overhead costs incurred amounted to $18,200.
• Variable manufacturing overhead applied to products: $18,375.
= 1,910 hours × ($2.10 per hour ? $2.00 per hour)
= 1,910 hours × ($0.10 per hour)
= $191 U
Reference: CH09-Ref44
Ravena Labs., Inc.makes a single product which has the following standards:
Direct materials: 2.5 ounces at $20 per ounce
Direct labor: 1.4 hours at $12.50 per hour
Variable manufacturing overhead: 1.4 hours at 3.50 per hour
Variable manufacturing overhead is applied on the basis of standard direct labor-hours.The following data are available for October:
• 3,750 units of compound were produced during the month.
• There was no beginning direct materials inventory.
• Direct materials purchased: 12,000 ounces for $225,000.
• The ending direct materials inventory was 2,000 ounces.
• Direct labor-hours worked: 5,600 hours at a cost of $67,200.
• Variable manufacturing overhead costs incurred amounted to $18,200.
• Variable manufacturing overhead applied to products: $18,375.
Learning Objectives
- Understand the concept and calculation of variable overhead rate and efficiency variances.
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