Question

Viger Corporation has a standard cost system in which it applies manufacturing overhead to products on the basis of standard machine-hours (MHs). The company has provided the following data for the most recent month: Budgeted level of activity 7,900 MHs Actual level of activity 8,100 MHs Standard variable manufacturing overhead rate $ 6.60 per MH Actual total variable manufacturing overhead $ 51,200 What was the variable overhead rate variance for the month?

Multiple Choice

$1,434 Favorable

$1,320 Unfavorable

$940 Favorable

$2,260 Favorable

Answer 1

$2,260 Favorable

Step-by-step explanation:

The computation of the variable overhead rate variance is shown below:

= Actual hours × actual rate - actual hours × standard rate

= $51,200 - 8,100 hours × $6.60

= $51,200 - $53,260

= $2,260 favorable

The Actual total variable manufacturing overhead comprises of

= Actual hours × actual rate

= $51,200

Simply we put the figures on the given formula.