Handerson Corporation makes a product with the following standard costs: ...
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Accounting
Handerson Corporation makes a product with the following standard costs:
Standard Quantity or Hours
Standard Price or Rate
Direct materials
9.8
kilos
$
7.30
per kilo
Direct labor
0.3
hours
$
33.00
per hour
Variable overhead
0.3
hours
$
7.30
per hour
The company reported the following results concerning this product in August.
Actual output
4,500
units
Raw materials used in production
30,330
kilos
Purchases of raw materials
32,900
kilos
Actual direct labor-hours
1,110
hours
Actual cost of raw materials purchases
$
208,920
Actual direct labor cost
$
24,036
Actual variable overhead cost
$
8,840
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 August is:
Multiple Choice
$737 F
$896 U
$737 U
$896 F
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