Question
Kartman Corporation makes a product with the following standard costs: Standard Quantity or Hours Standard Price or Rate Standard Cost Per Unit Direct materials 6.8
Kartman Corporation makes a product with the following standard costs:
Standard Quantity or Hours | Standard Price or Rate | Standard Cost Per Unit | |
---|---|---|---|
Direct materials | 6.8 pounds | $ 7.30 per pound | $ 49.64 |
Direct labor | 0.5 hours | $27.00 per hour | $ 13.50 |
Variable overhead | 0.5 hours | $4.30 per hour | $ 2.15 |
In June the company's budgeted production was 3,700 units but the actual production was 3,800 units. The company used 22,450 pounds of the direct material and 2,320 direct labor-hours to produce this output. During the month, the company purchased 25,700 pounds of the direct material at a cost of $173,180. The actual direct labor cost was $57,321 and the actual variable overhead cost was $9,631.
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 June is:
Multiple Choice
-
$283 Unfavorable
-
$283 Favorable
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$345 Favorable
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$345 Unfavorable
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