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Standard Quantity or Hours Standard Price or Rate Standard Cost Per Unit Direct materials 6.5 ounces $ 2.00 per ounce $ 13.00 Direct labor 0.8

Standard Quantity or Hours Standard Price or Rate Standard Cost Per Unit
Direct materials 6.5 ounces $ 2.00 per ounce $ 13.00
Direct labor 0.8 hours $ 18.00 per hour $ 14.40
Variable overhead 0.8 hours $ 2.00 per hour $ 1.60

The company reported the following results concerning this product in February.

Originally budgeted output 4,600 units
Actual output 5,300 units
Raw materials used in production 30,500 ounces
Actual direct labor-hours 2,110 hours
Purchases of raw materials 32,900 ounces
Actual price of raw materials $ 97.10 per ounce
Actual direct labor rate $ 87.60 per hour
Actual variable overhead rate $ 1.50 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 February is:

Multiple Choice

  • $1,055 F

  • $1,060 F

  • $1,055 U

  • $1,060 U

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