Kartman Corporation makes a product with the following

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


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