Asked by Araceli ArredondoLona on Jul 28, 2024
Verified
Vermeillen Corporation uses a standard costing system in which variable manufacturing overhead is assigned to production on the basis of the number of machine setups. The following data pertain to one month's operations:Variable manufacturing overhead cost incurred: $70,000Total variable manufacturing overhead variance: $4,550 FavorableStandard machine setups allowed for actual production: 3,550Actual machine setups incurred: 3,500The standard variable overhead rate per machine setup is:
A) $20.00
B) $21.30
C) $18.44
D) $21.00
Standard Machine Setups
This term refers to the predetermined arrangements and settings on machinery for standard operations, aiming to minimize setup time and costs.
Standard Variable Overhead Rate
The predetermined rate at which variable overhead costs are expected to occur relative to a specific activity or cost driver.
Variable Manufacturing Overhead
The portion of manufacturing overhead costs that varies with production volume.
- Comprehend the method for determining variances in variable overhead rates.
- Comprehend the effect of actual versus standard machine-hours on the variances in overhead costs.
Verified Answer
Learning Objectives
- Comprehend the method for determining variances in variable overhead rates.
- Comprehend the effect of actual versus standard machine-hours on the variances in overhead costs.
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