pter 10 Quiz Saved Help Save & Exit Submit A manufacturing company that has only
ID: 2440993 • Letter: P
Question
pter 10 Quiz Saved Help Save & Exit Submit A manufacturing company that has only one product has established the following standards for its variable manufacturing overhead. The company bases its variable manufacturing overhead standards on direct labor-hours. Standard hours per unit of output Standard variable overhead rate 3.30 DLHs 00:42:09 $10.65 per DLH The following data pertain to operations for the last month: 9,300 DLHs Actual direct labor-hours Actual total variable manufacturing overhead cost Actual output $95,790 2,600 units What is the variable overhead rate variance for the month? Multiple Choice $3,536 U K Prex 8 of 10 NextExplanation / Answer
Variable Overhead Rate Variance is the difference between actual variable overhead rate and the standard variable overhead rate at the actual level of input (variable overhead) used.
Actual Variable Overhead Rate X Actual Level of Activity
Les: Standard Variable Overhead Rate X Actual Level of Activity.
= Variable overhead Rate Variance
In This Problem.
Actual Variable Overhead Rate= 95,790 / 9300 Hours= 10.3.
.Applying the Formula .
Actual Variable Overhead Rate X Actual Level of Activity : 9300 hours X 10.3 = $95,790
Less:Standard Variable Overhead Rate X Actual Level of Activity : 9300 hours X 10,65= $99045 ( Note: Standard Variable Rate is given as $ 10.65). = $ 3255 F
Actual money spent is less than the Standard/ Budgeted amount of variable overhead, This Variance is a Favorable Variance
The answer is the Last option in the Multiple Choice: 3255 F
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