Cost 104 89000 SolutionStandard Rate 130 per machinehour

Solution

Standard Rate = $1.30 per machine-hour
Standard machine hour per case = 0.80
Number of case produced = 80,000

Standard machine hour = Standard machine hour per case * Number of case produced
Standard machine hour = 0.80 * 80,000
Standard machine hour = 64,000

Actual machine hour = 63,000
Actual variable overhead cost = $89,000

Standard variable overhead cost = Standard Rate * Standard machine hour
Standard variable overhead cost = $1.30 * 64,000
Standard variable overhead cost = $83,200

Variable Overhead Rate Variance = Actual Variable Overhead Cost - Actual machine hour * Standard Rate
Variable Overhead Rate Variance = $89,000 - 63,000 * $1.30
Variable Overhead Rate Variance = $7,100 Unfavorable

Variable Overhead Efficiency Variance = Actual machine hour * Standard Rate - Standard variable overhead cost
Variable Overhead Efficiency Variance = 63,000 * $1.30 - $83,200
Variable Overhead Efficiency Variance = $1,300 Favorable

Underapplied Variable Overhead = Actual variable overhead cost - Standard variable overhead cost
Underapplied Variable Overhead = $89,000 - $83,200
Underapplied Variable Overhead = $5,800