Highfill Corporation's Variable Overhead Is Applied on the Basis of Direct

question 460

Essay

Highfill Corporation's variable overhead is applied on the basis of direct labor-hours. The standard cost card for product D80D specifies 8.4 direct labor-hours per unit of D80D. The standard variable overhead rate is $5.60 per direct labor-hour. During the most recent month, 800 units of product D80D were made and 6,800 direct labor-hours were worked.The actual variable overhead incurred was $41,140.Required:a. What was the variable overhead rate variance for the month?b. What was the variable overhead efficiency variance for the month?

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Definitions:

Average Total Cost

The total cost of production divided by the total output, representing the cost per unit of production.

Advertising Slogan

A short and striking or memorable phrase used in advertising campaigns.

Potential Buyers

Individuals or entities that have shown interest or are in a position to purchase goods or services.

Perfect Competition

A theoretical market structure characterized by an infinite number of small firms, homogeneous products, no barriers to entry or exit, and perfect information, leading to optimal distribution of resources.