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alina1380 [7]
3 years ago
14

Highfill Corporation's variable overhead is applied on the basis of direct labor-hours. The standard cost card for product D80D

specifies 6.6 direct labor-hours per unit of D80D. The standard variable overhead rate is $6.10 per direct labor-hour. During the most recent month, 1,300 units of product D80D were made and 8,700 direct labor-hours were worked. The actual variable overhead incurred was $56,770. Required: a. What was the variable overhead rate variance for the month
Business
1 answer:
Dmitry_Shevchenko [17]3 years ago
4 0

Answer:

Manufacturing overhead rate variance= $3,741 unfavorable

Explanation:

Giving the following information:

The standard variable overhead rate is $6.10 per direct labor-hour.

During the most recent month, 1,300 units of product D80D were made and 8,700 direct labor-hours were worked. The actual variable overhead incurred was $56,770

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

Manufacturing overhead rate variance= (standard rate - actual rate)* actual quantity

actual rate= 56,770/8,700= $6.53 per hour

Manufacturing overhead rate variance= (6.1 - 6.53)*8,700

Manufacturing overhead rate variance= $3,741 unfavorable

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