Epley Corporation Makes a Product with the Following Standard Costs

question 117

Multiple Choice

Epley Corporation makes a product with the following standard costs: In July the company produced 3,300 units using 12,240 pounds of the direct material and 2,760 direct labor-hours. During the month, the company purchased 13,000 pounds of the direct material at a cost of $35,100. The actual direct labor cost was $51,612 and the actual variable overhead cost was $20,148. 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 July is:

• A)$1,932 U
• B)$1,932 F
• C)$1,848 U
• D)$1,848 F

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Definitions:

Diesel Fuel

A type of fuel derived from petroleum, used in diesel engines.

Gallons

A unit of volume for fluid measure equal to four quarts, used in the United States.

Minutes

A unit of time equal to sixty seconds or one-sixtieth of an hour.

Hours

A unit of time equal to 60 minutes.