Underfoot Products Uses Standard Costing Compute the Variable Overhead Variance

question 66

Multiple Choice

Underfoot Products uses standard costing. The following information about overhead was generated during May: $\begin{array}{lrr} \text { Standard variable overhead rate} & \text { \$ 2 per machine hous}\\ \text { Standard fixed overhead rate} & \text { \$ 1 per machine hous }\\ \text { Actual variable overhead costs } &\$361,000\\ \text { Actual fixed overhead costs } &\$175,000\\ \text {Buclgeted fixed overhead costs } &\$190,000\\ \text { Standard machine hours per unit produced } &10\\ \text {Good units prochuced } &18,000\\ \text { Actual machine hours} &200,000\\\end{array}$
Compute the variable overhead variance.

• A) $21,000 (F)
• B) $21,000 (U)
• C) $1,000 (U)
• D) $11,000 (F)

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Definitions:

Credit Columns

The sections on the right side of accounting ledgers where credit transactions are recorded.

Chart Of Accounts

A systematic listing of all account titles and numbers being used by an organization to track its financial transactions and prepare financial statements.

Ledger

A comprehensive book or computer file for recording and totaling economic transactions measured in terms of a monetary unit of account by account type, with debit and credit entries in separate columns and a beginning and ending balance for each account.

Working Paper

Documents prepared by accountants during an audit that summarize the findings and support the final report.