Majer Corporation makes a product with the following standard costs: Standard Quantityor HoursStandard Price orRateStandard Cost Per UnitDirect materials 6.7ounces$3.00per ounce$20.10Direct labor 0.7hours$18.00per hour$12.60Variable overhead 0.7hours$3.00per hour$2.10 The company reported the following results concerning this product in February. Originally budgeted output 5,700unitsActual output 8,500unitsRaw materials used in production 30,800ouncesActual direct labor-hours 1,980hoursPurchases of raw materials 31,800ouncesActual price of raw materials$92.90per ounceActual direct labor rate$102.40per hourActual variable overhead rate$2.10per hour The company applies variable overhead on the basis of direct labor-hours. The direct materials purchases variance is computed when the materials are purchased. The variable overhead rate variance for February is:

Name: Majer Corporation makes a product with the following standard costs:
Uploaded: 2024-03-20T06:33:06.000Z
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Description: Majer Corporation makes a product with the following standard costs: Standard Quantityor HoursStandard Price orRateStandard Cost Per UnitDirect materials 6.7ounces$3.00per ounce$20.10Direct labor 0.7hours$18.00per hour$12.60Variable overhead 0.7hour

SOLUTION- VARIABLE OVERHEAD RATE VARIANCE- ITS FIND DIFFERENCE BETWEEN ACTUAL VARIABLE OVERHEAD…

Answered: Majer Corporation makes a product with…

Principles of Cost Accounting

17th Edition

ISBN:9781305087408

Author:Edward J. Vanderbeck, Maria R. Mitchell

Publisher:Edward J. Vanderbeck, Maria R. Mitchell

Chapter8: Standard Cost Accounting—materials, Labor, And Factory Overhead

Section: Chapter Questions

Problem 8P: Carlo Lee Corp. has established the following standard cost per unit: Although 10,000 units were...

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Majer Corporation makes a product with the following standard costs:

	Standard Quantity or Hours	Standard Price or Rate	Standard Cost Per Unit
Direct materials		6.7	ounces	$	3.00	per ounce	$	20.10
Direct labor		0.7	hours	$	18.00	per hour	$	12.60
Variable overhead		0.7	hours	$	3.00	per hour	$	2.10

The company reported the following results concerning this product in February.


Originally budgeted output		5,700	units
Actual output		8,500	units
Raw materials used in production		30,800	ounces
Actual direct labor-hours		1,980	hours
Purchases of raw materials		31,800	ounces
Actual price of raw materials	$	92.90	per ounce
Actual direct labor rate	$	102.40	per hour
Actual variable overhead rate	$	2.10	per hour

The company applies variable overhead on the basis of direct labor-hours. The direct materials purchases variance is computed when the materials are purchased.

The variable overhead rate variance for February is:

Definition Definition System of assigning an estimated cost to the product (instead of the actual cost) so that the product cost can be determined well in advance and the pricing of the product can be done on time. Since the actual cost cannot be predicted at the initial stage of the production process, the estimated cost is recorded in the books. Any deviation of the estimated cost of the actual cost is adjusted in the books at the end of the period.

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