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

question 89

Essay

Metz Corporation's variable overhead is applied on the basis of direct labor-hours. The standard cost card for product M70T specifies 7.7 direct labor-hours per unit of M70T. The standard variable overhead rate is $6.30 per direct labor-hour. During the most recent month, 400 units of product M70T were made and 3,000 direct labor-hours were worked.
The actual variable overhead incurred was $18,000.
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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