Vermeillen Corporation uses a standard costing system in which variable manufacturing overhead is assigned to production on the basis of the number of machine setups. The following data pertain to one month's operations:

• Variable manufacturing overhead cost incurred: $70,000
• Total variable manufacturing overhead variance: $4,550 Favorable
• Standard machine setups allowed for actual production: 3,550
• Actual machine setups incurred: 3,500

The variable overhead rate variance is:

• $1,000 Favorable

• $1,000 Unfavorable

• $3,500 Unfavorable

• $3,500 Favorable

2)

Kartman Corporation makes a product with the following standard costs:

	Standard Quantity or Hours			Standard Price or Rate			Standard Cost Per Unit
Direct materials		6.5	pounds	$	7.00	per pound	$	45.50
Direct labor		0.6	hours	$	24.00	per hour	$	14.40
Variable overhead		0.6	hours	$	4.00	per hour	$	2.40

In June the company's budgeted production was 3,400 units but the actual production was 3,500 units. The company used 22,150 pounds of the direct material and 2,290 direct labor-hours to produce this output. During the month, the company purchased 25,400 pounds of the direct material at a cost of $170,180. The actual direct labor cost was $57,021 and the actual variable overhead cost was $8,931.

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 labor rate variance for June is:

• $1,890 F

• $2,061 U

• $2,061 F

• $1,890 U