Question: Beverly Company has determined a standard variable overhead rate of $1.25 per direct labor hour and expects to incur 1 labor hour per unit produced.

Beverly Company has determined a standard variable overhead rate of $1.25 per direct labor hour and expects to incur 1 labor hour per unit produced. Last month, Beverly incurred 1,900 actual direct labor hours in the production of 2,000 units. The company has also determined that its actual variable overhead rate is $1.20 per direct labor hour. Calculate the variable overhead rate and efficiency variances as well as the total amount of over- or under-applied variable overhead.

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