Venus Company Applies Overhead Based on Direct Labor Hours

question 34

Multiple Choice

Venus Company applies overhead based on direct labor hours.The variable overhead standard is 10 hours at $3.50 per hour.During October,Venus Company spent $157,600 for variable overhead.47,440 labor hours were used to produce 4,800 units.What is the variable overhead rate variance?

• A)$8,440 favorable
• B)$1,960 favorable
• C)$10,400 favorable
• D)$1,960 unfavorable

---

Definitions:

Fair Labor Standards Act

Legislation in the United States that establishes minimum wage, overtime pay eligibility, recordkeeping, and child labor standards.

Time And A Half

A rate of pay that is 1.5 times the employee's standard hourly wage, typically awarded for overtime hours worked.

Normal Wage

The standard or average amount of pay that workers receive for their labor in a specific job or industry.

Petty Cash Fund

Cash kept on hand in the office for small purchases.