Answer:
Manufacturing overhead rate variance= $2,600 favorable
Explanation:
Giving the following information:
Budgeted level of activity 9,300 MHs
Actual level of activity 9,500
MHs Standard variable manufacturing overhead rate $ 8.00 per MH
Actual total variable manufacturing overhead $ 73,320
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= 73,320/9,500= $7.72 per machine hour
Manufacturing overhead rate variance= (8 - 7.72)*9,500
Manufacturing overhead rate variance= $2,600 favorable
