Homework SourseMajer Corporation makes a product with the following standar
Majer Corporation makes a product with the following standard costs:
The company reported the following results concerning this product in February.
The company applies variable overhead on the basis of direct labor-hours. The direct materials purchases variance is computed when the materials are purchased.
The variable overhead rate variance for February is:
Garrison 16e Rechecks 2017-10-31
Multiple Choice
$1,710 F
$1,715 F
$1,710 U
$1,715 U
| Standard Quantity or Hours | Standard Price or Rate | Standard Cost Per Unit | ||||||
| Direct materials | 6.3 | ounces | $ | 2.00 | per ounce | $ | 12.60 | |
| Direct labor | 0.5 | hours | $ | 10.00 | per hour | $ | 5.00 | |
| Variable overhead | 0.5 | hours | $ | 4.00 | per hour | $ | 2.00 | |
Solution
A. $1,710 F
Variable overhead rate variance = AH × (AR ? SR)
= 1,900 hours × ($3.10 per hour ? $4.00 per hour)
= $1,710 F
