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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