Doogan Corporation makes a product with the following standard costs:

	Standard Quantity or Hours			Standard Price or Rate
Direct materials		7.9	grams	$	2.50	per gram
Direct labor		0.5	hours	$	25.00	per hour
Variable overhead		0.5	hours	$	7.50	per hour

The company produced 5,700 units in January using 39,810 grams of direct material and 2,430 direct labor-hours. During the month, the company purchased 44,900 grams of the direct material at $2.20 per gram. The actual direct labor rate was $24.30 per hour and the actual variable overhead rate was $7.30 per hour.

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 January is:

Multiple Choice

• $486 U

• $570 F

• $486 F

• $570 U