1) What is the variable overhead rate variance for March?

Preble Company manufactures one product. Its variable manufacturing overhead is applied to production based on direct labor-hours and its standard cost card per unit is as follows:

Direct materials: 4 pounds at $10 per pound	$	40
Direct labor: 2 hours at $13 per hour		26
Variable overhead: 2 hours at $9 per hour		18
Total standard cost per unit	$	84

The planning budget for March was based on producing and selling 29,000 units. However, during March the company actually produced and sold 34,000 units and incurred the following costs:

1. Purchased 160,000 pounds of raw materials at a cost of $8.50 per pound. All of this material was used in production.

2. Direct laborers worked 59,000 hours at a rate of $14 per hour.

3. Total variable manufacturing overhead for the month was $564,040

   2) What is the variable overhead efficiency variance for March?

4. Preble Company manufactures one product. Its variable manufacturing overhead is applied to production based on direct labor-hours and its standard cost card per unit is as follows:

5. Direct materials: 4 pounds at $10 per pound	$	40
   Direct labor: 2 hours at $13 per hour		26
   Variable overhead: 2 hours at $9 per hour		18
   Total standard cost per unit	$	84

   The planning budget for March was based on producing and selling 29,000 units. However, during March the company actually produced and sold 34,000 units and incurred the following costs:

6. Purchased 160,000 pounds of raw materials at a cost of $8.50 per pound. All of this material was used in production.

7. Direct laborers worked 59,000 hours at a rate of $14 per hour.

8. Total variable manufacturing overhead for the month was $564,040.