The Haney Corporation has a standard costing system. Variable manufacturing overhead is applied on the basis of direct labor-hours. The following data are available for January:

• Actual variable manufacturing overhead: $25,500
• Actual direct labor-hours worked: 5,800
• Variable overhead rate variance: $600 Favorable
• Variable overhead efficiency variance: $2,475 Unfavorable

The standard hours allowed for January production is:

Multiple Choice

• 5,250 hours

• 5,800 hours

• 5,425 hours

• 5,975 hours

The following standards for variable manufacturing overhead have been established for a company that makes only one product:

Standard hours per unit of output		1.2	hours
Standard variable overhead rate	$	19.80	per hour

The following data pertain to operations for the last month:

Actual hours		2,100	hours
Actual total variable manufacturing overhead cost	$	40,740
Actual output		1,600	units

What is the variable overhead rate variance for the month?

Multiple Choice

• $2,724 U

• $840 F

• $3,492 U

• $768 U

Poorly trained workers could have an unfavorable effect on which of the following variances?

	Labor Rate Variance	Materials Quantity Variance
A)	Yes	Yes
B)	Yes	No
C)	No	Yes
D)	No	No

Garrison 16e Rechecks 2017-08-17

Multiple Choice

• Choice D

• Choice C

• Choice A

• Choice B

The Maxit Corporation has a standard costing system in which variable manufacturing overhead is assigned to production on the basis of standard machine-hours. The following data are available for July:

• Actual variable manufacturing overhead cost incurred: $25,480
• Actual machine-hours worked: 2,900 hours
• Variable overhead rate variance: $5,370 U
• Total variable overhead spending variance: $7,480 U

The variable overhead efficiency variance for July is:

Multiple Choice

• $2,110 U

• $12,850 F

• $12,850 U

• $2,110 F