TB MC Qu. 10-115 Kartman Corporation makes a product with ...

Kartman Corporation makes a product with the following standard costs:

	Standard Quantity or Hours			Standard Price or Rate			Standard Cost Per Unit
Direct materials		6.6	pounds	$	7.10	per pound	$	46.86
Direct labor		0.5	hours	$	25.00	per hour	$	12.50
Variable overhead		0.5	hours	$	4.10	per hour	$	2.05

In June the company's budgeted production was 3,500 units but the actual production was 3,600 units. The company used 22,250 pounds of the direct material and 2,300 direct labor-hours to produce this output. During the month, the company purchased 25,500 pounds of the direct material at a cost of $171,180. The actual direct labor cost was $57,121 and the actual variable overhead cost was $9,031.

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

• $312 U

• $399 F

• $399 U

• $312 F