Houghton Company maintains warehouses that stock items carried by its e-retailer clients. When one of...
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Houghton Company maintains warehouses that stock items carried by its e-retailer clients. When one of Houghton's clients receives an order from an online customer, the order is forwarded to Houghton. Houghton then pulls the item from the warehouse, packs it and ships it to the customer. Houghton uses a predetermined variable overhead rate based on direct labor-hours. According to the company's records, O.04 direct labor-hours are required to fulfill an order for one item and the variable overhead rate is $7.40 per direct-labor hour. During July, Houghton shipped 30,000 orders using 12,800 direct labor-hours. The company incurred a total of $93,440 in variable overhead costs. The variable overhead rate variance during July was
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