Required information

The Foundational 15 (Algo) [LO10-1, LO10-2, LO10-3]

Skip to question

[The following information applies to the questions displayed below.]

Preble Company manufactures one product. Its variable manufacturing overhead is applied to production based on direct labor-hours and its standard cost card per unit is as follows:

Direct materials: 4 pounds at $10 per pound	$ 40
Direct labor: 2 hours at $16 per hour	32
Variable overhead: 2 hours at $6 per hour	12
Total standard cost per unit	$ 84

The planning budget for March was based on producing and selling 30,000 units. However, during March the company actually produced and sold 34,500 units and incurred the following costs:

1. Purchased 150,000 pounds of raw materials at a cost of $9.20 per pound. All of this material was used in production.

2. Direct laborers worked 62,000 hours at a rate of $17 per hour.

3. Total variable manufacturing overhead for the month was $390,600.

rev: 11_20_2017_QC_CS-109672

Foundational 10-14 (Algo)

14. What is the variable overhead rate variance for March? (Round the actual overhead rate to two decimal places. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance.). Input all amounts as positive values.)