Question

Majer Corporation makes a product with the following standard costs: Direct materials Direct labor Variable overhead Standard Standard Quantity or Standard Price or Cost Per Hours Rate Unit 6.4 ounces $ 3.00 per ounce $19.20 0.4 hours $13.00 per hour $ 5.20 0.4 hours $ 5.00 per hour $ 2.00 The company reported the following results concerning this product in February. Originally budgeted output Actual output Raw materials used in production Actual direct labor-hours Purchases of raw materials Actual price of raw materials Actual direct labor rate Actual variable overhead rate 4,800 units 4,900 units 30,230 ounces 1,910 hours 32,600 ounces $ 2.90 per ounce $ 12.40 per hour $ 4.90 per hour 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: Multiple Choice

Answer 1

Calculation :- Variable overhead Mate Jawance - Actual & I hour Actual/-/Actual x Stancked Rate / hour Rate (1910 x 4.90) -(1910 x 5.00) 9359- 9550 191 paid Variance is favorable is less than Standard as actual rate rate budgeted.