Question

Judd Company uses standard costs for its manufacturing division. Standards specify 0.1 direct labor hours per unit of product. The allocation base for variable overhead costs is direct labor hours. At the beginning of the​ year, the static budget for variable overhead costs included the following​ data: Production volume 6 comma 100 units Budgeted variable overhead costs $ 15 comma 000 Budgeted direct labor hours 610 hours At the end of the​ year, actual data were as​ follows: Production volume 4 comma 000 units Actual variable overhead costs $ 15 comma 300 Actual direct labor hours 490 hours What is the variable overhead cost​ variance? (Round any intermediate calculations to the nearest​ cent, and your final answer to the nearest​ dollar.)

Answer 1

Variable overhead cost variance = $2,949.80

Step-by-step explanation:

As per the data given in the question,

Actual overhead cost = $15,000

Actual hours = 490

Actual cost = $30.61 per hour

Standard overhead cost = $15,000

Standard hours = 610

Budgeted cost = $24.59 per hour

Variable overhead cost variance = Actual hours × (Actual cost per hour - Standard cost per hour)

= 490 × ( $30.61 - $24.59 )

= $2,949.80