Russo Corporation manufactured 21000 air conditioners during

Russo Corporation manufactured? 21,000 air conditioners during November. The overhead? cost-allocation base is? $34.50 per? machine-hour. The following variable overhead data pertain to? November:

Actual Budgeted Production ?

21,000 units ?23,000 units ?Machine-hours ?12,700 hours ?13,800 hours Variable overhead cost per? machine-hour ?$34.00 ?$34.50 What is the total variable overhead? variance? A. ?$2,900.00 unfavorable B. ?$3,450.00 unfavorable C. ?$2,900.00 favorable D. ?$3,450.00 favorable

Solution

Standard hours = 13800/23000= 0.6 Total variable overhead variance = (12700*34)-(21000*0.6*34.5)= $2900 favorable