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Sagot :
The variable overhead rate variance is: c. $6,052 U.
Variable overhead rate variance
First step is to calculate variable component of the predetermined overhead rate using this formula
Variable component of the predetermined overhead rate= Budgeted variable manufacturing overhead/Budgeted hours
Let plug in the formula
Variable component of the predetermined overhead rate=$ 28,200/12,000 labor-hours
Variable component of the predetermined overhead rate=$2.35 per labor-hour
Second step is to calculate variable overhead rate variance using this formula
Variable overhead rate variance=(AH×AR)-(AH×SR)
Let plug in the formula
Variable overhead rate variance= $ 26,967- ( 8,900 labor-hours×$2.35 per labor-hour)
Variable overhead rate variance= $ 26,967- $20,915
Variable overhead rate variance= $6,052 U (Unfavorable)
Therefore the variable overhead rate variance is: c. $6,052 U.
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