Question

The following data have been provided by Lopus Corporation: Budgeted production Standard machine-hours per unit Standard lubricants Standard supplies 4,000 units 4.1 machine-hours 5.60 per machine-hour 4.30 per machine-hour $ $ Actual production Actual machine-hours Actual lubricants (total) Actual supplies (total) 4,300 units 9,480 machine-hours $ 54,833 $40,239 Required: Compute the variable overhead rate variances for lubricants and for supplies. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.) Variable Overhead Rate Variance Lubricants Supplies

2.

Answer 1

1) Variable overhead rate variance = (Standard rate-actual rate)actual machine hour

Lubricants = (5.6*9480-54833) = 1745 U

Supplies = (4.3*9480-40239) = 525 F

2) Material price variance = (Standard price-actual price)actual quantity = (12.50-12.25)*35240 = 8810 F

3) Labor rate variance = (Standard rate-actual rate)actual hour = (11*530-13900) = 8070 U