Question

Speaker City designs and manufactures highend home theater speakers. Speaker City uses a standard variable overhead rate of hours per unit at a cost of per hour. Data for the month of June shows that Speaker City produced units and recorded actual variable overhead costs of . What is the total variable overhead variance for the month of​ June?

Answer 1

Answer: $18,100 unfavorable

Explanation: It should be noted that the total variable overhead variance for the month of​ June is $18,100. Nonetheless, to our surprise it appears unfavourable despite the fact that Speaker City uses a standard variable overhead rate of hours per unit at a cost of per hour.