The Beverly Company has determined a standard variable overhead rate of $1.50 per direct labor hour and expects to incur 1.0 labor hours per unit produced. Last month, Beverly incurred 1,000 actual direct labor hours in the production of 1,100 units. The company has also determined that its actual variable overhead rate is $1.45 per direct labor hour.

Required:

Calculate the variable overhead rate and efficiency variances, also indicate whether the variables are favorable or unfavorable, the total amount of variable overhead costs over or under applied.

Variable overhead rate variance
Variable Overhead Efficiency Variance
Over-applied or under-applied variable overhead costs