Question

TB MC Qu. 9-291 Kartman Corporation makes a product with ... Kartman Corporation makes a product with the following standard costs: Standard Quantity or Hours Standard Price or Rate Standard Cost Per Unit Direct materials 8.2 pounds $ 8.70 per pound $ 71.34 Direct labor 0.3 hours $ 41.00 per hour $ 12.30 Variable overhead 0.3 hours $ 5.70 per hour $ 1.71 In June the company's budgeted production was 5,100 units but the actual production was 5,200 units. The company used 23,850 pounds of the direct material and 2,460 direct labor-hours to produce this output. During the month, the company purchased 27,100 pounds of the direct material at a cost of $187,180. The actual direct labor cost was $58,721 and the actual variable overhead cost was $13,331. 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 June is:

Answer 1

Variable manufacturing overhead rate variance= $688.8 favorable

Step-by-step explanation:

Giving the following information:

Variable overhead 0.3 hours $5.70 per hour

The company used 2,460 direct labor-hours to produce this output. The actual variable overhead cost was $13,331.

To calculate the variable overhead rate variance, we need to use the following formula:

Variable manufacturing overhead rate variance= (standard rate - actual rate)* actual quantity

Actual rate= 13,331/2,460= $5.42

Variable manufacturing overhead rate variance= (5.7 - 5.42)*2,460

Variable manufacturing overhead rate variance= $688.8 favorable