Question: Austin Company allocates manufacturing overhead based on machine hours. Each chair produced should require 4 machine hours. Standard variable cost per machine hour is $5.40.

Austin Company allocates manufacturing overhead based on machine hours. Each chair produced should require 4 machine hours. Standard variable cost per machine hour is $5.40.

During January, Austin Company actually used 2,100 machine hours to make 510 chairs. The company spent $11,130 in variable manufacturing overhead costs and $9,100 in fixed manufacturing overhead costs.

What is the variable overhead cost variance?

  • $324 U

  • $210 U

  • $324 F

  • $210 F

  • I DON'T KNOW YET

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