Question

Majer Corporation makes a product with the following standard costs: Direct materials 6.4 ounces $3.00 per ounce $19.20. The variable overhead rate variance for February is: a. $19.20 favorable b. $19.20 unfavorable c. $6.4 favorable d. $6.4 unfavorable

Answer 1

To calculate the variable overhead rate variance, you need to compare the actual variable overhead rate to the standard variable overhead rate.

Standard Variable Overhead Rate = Total Standard Variable Overhead / Total Standard Hours

From the given information, we know the standard cost for direct materials is $19.20, and the standard hours are not explicitly mentioned. However, we don't need the standard hours for this calculation because we only need the standard variable overhead rate, which is not affected by the standard hours.

So, the Standard Variable Overhead Rate is $19.20.

Now, to calculate the variable overhead rate variance:

Variable Overhead Rate Variance = (Actual Variable Overhead Rate - Standard Variable Overhead Rate) * Actual Hours

Since the actual variable overhead rate is not provided in the question, we cannot calculate the variance without that information. Therefore, we cannot determine whether it's favorable or unfavorable based on the information given.