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nasty-shy [4]
3 years ago
7

Based on the following information, calculate the variable overhead rate variance. Actual variable overhead cost $15,500 Actual

hours used 4,200 Standard hours allowed 4,000 Standard variable overhead rate $3.75 per hour
Business
1 answer:
Nesterboy [21]3 years ago
7 0

Answer:

Rate variance = $250 favorable

Explanation:

<em>The variable overhead rate variance is the difference between the actual variable cost and the standard variable overhead  cost the actual actual hours used.</em>

<em>We would compare the actual cost to the standard cost of the actual hours used . This is done below as follows:</em>

                                                                                               $

4,200 hours should have cost (4200 × 3.75 )               15,750

but did cost                                                                       <u>15,500</u>

Rate variance                                                                 <u>      250</u>  Favorable

Note the actual hours of 4,200 cost $250 less than it should be have cost . Hence the variance is favorable

Rate variance = $250

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