We appreciate your visit to Raven applies overhead based on direct labor hours The variable overhead standard is 21 hours at 30 per hour During July Raven spent 257 700. This page offers clear insights and highlights the essential aspects of the topic. Our goal is to provide a helpful and engaging learning experience. Explore the content and find the answers you need!
Answer :
To calculate the variable overhead rate variance, we need to compare the actual variable overhead rate with the standard variable overhead rate.
Standard variable overhead rate = $30 per hour
Actual variable overhead rate = Total variable overhead / Total labor hours
Total variable overhead = $257,700
Total labor hours = 7,940
Actual variable overhead rate = $257,700 / 7,940 = $32.50 per hour
Variable overhead rate variance = (Standard variable overhead rate - Actual variable overhead rate) * Total labor hours
Variable overhead rate variance = ($30 - $32.50) * 7,940 = -$19,850
Since the actual variable overhead rate is higher than the standard rate, the variance is unfavorable. Therefore, the correct answer is $19,500 unfavorable. Note: There seems to be a discrepancy in the provided answer options. The correct variance is $19,850 unfavorable, not $13,890 or $6,945.
Learn more about variable overhead rate here: brainly.com/question/19593252
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