Cheerlos is a brand of cereal manufactured by General Milis in the United States, consisting of pulvertxed osts. General Mills' managemant has established the following standards: Direct materhals: 2.5 ounces at $20 per ounce Direct labor: 1.4 hours at $12,50 per hour Varlable manufocturing overhead: 1.4 hours at 3.50 per hour Varlable manufacturing overhead is applled on the basis of standard direct lobor-hours. The following data are avallable for October: - 3,750 units of compound were produced during the month. - There was no beginning direct materials inventory. - Direct materlals purchased: 12,000 ounces for $225,000. - The ending direct materials inventory was 2,000 ounces. - Direct labor-hours worked: 5,600 hours at a cost of $67,200. - Variable manufacturing overhead costs incurred amounted to \$18,200. - Varlable manufacturing overhead applled to products: \$18,375. The varlable overhead rate variance for October is: Varlable Manufacturing Overhead rate varlance =(ARSR)AH AR= actual variable manufacturing overhead rate SR= standard variable manufacturing overhead rate AH= actual hours worked Variable Manufacturing Overhead Efficiency Variance =(AHSH)2SR AH= actual hours worked SH= standard hours for the actual level of production SR= standard variable manufacturing overhead rate