At Cady Corporation, maintenance is a variable overhead cost that is based on machine-hours. The performance...
At Cady Corporation, maintenance is a variable overhead cost that is based on machine-hours. The performance report for June showed that actual maintenance costs totaled $9,600 and that the associated rate variance was $400 unfavorable. If 8,000 machine-hours were actually worked during June, the standard maintenance cost per machine-hour was: ___________________________________________________________________
Homework Answers
Variable overhead rate variance = (AH × AR) - (AH × SR)
$400 U = $9,600 - (8,000 MHs × SR)
$400 = $9,600 - (8,000 MHs × SR)
8,000 MHs × SR = $9,600 - $400
8,000 MHs × SR = $9,200.
SR = $9,200 ÷ 8,000 MHs
SR = $1.15 per MH
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At Cady Corporation, maintenance is a variable overhead cost
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