Vermeillen Corporation Uses a Standard Costing System in Which Variable $\bullet$

question 25

Multiple Choice

Vermeillen Corporation uses a standard costing system in which variable manufacturing overhead is assigned to production on the basis of the number of machine setups. The following data pertain to one month's operations: $\bullet$ Variable manufacturing overhead cost incurred: $70,000
$\bullet$ Total variable manufacturing overhead variance: $4,550 Favorable
$\bullet$ Standard machine setups allowed for actual production: 3,550
$\bullet$ Actual machine setups incurred: 3,500
The variable overhead rate variance is:

• A) $1,000 Favorable
• B) $1,000 Unfavorable
• C) $3,500 Unfavorable
• D) $3,500 Favorable