Question

The following data for the Safety Company pertain to the produc­tion of 3,000 clay pigeons during July:

Standard variable-overhead cost was $5.00 per pound of clay.

The actual variable-overhead cost was $11,340.

Standard variable-overhead cost allowed for units produced was $12,000.

Variable-overhead efficiency variance was $340 unfavorable.

_____ is the variable-overhead rate variance.

Group of answer choices

$800 unfavorable

$1,000 favorable

$800 favorable

$560 unfavorable

Answer 1

Correct answer----------$1,000 Favorable

Working

Variable Overhead Rate Variance
(	Standard Rate	-	Actual Rate	)	x	Actual pounds
(	$                    5.00	-	$                     4.59	)	x	2468
	$            1,000.00
	Variance		$             1,000.00			Favourable-F

Working to calculate actual rate

Variable Overhead Efficiency Variance
(	Standard pounds	-	Actual pounds	)	x	Standard Rate
(	2400	-	2468	)	x	$              5.00
	$             (340.00)
	Variance		$                 340.00			Unfavourable-U