Kartman Corporation makes a product with the following standard costs: Standard Quantity or Hours Standard Price or
Question:
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 variable overhead rate variance for June is:
Multiple Choice
$210 U
$210 F
$229 F
$229 U
Managerial Accounting
ISBN: 978-0697789938
13th Edition
Authors: Ray H. Garrison, Eric W. Noreen, Peter C. Brewer