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Question - Doogan Corporation makes a product with the following standard costs:
Standard Quantity or Hours
Standard Price or Rate
Direct materials
7.4 grams
$2.00 per gram
Direct labor
0.5 hours
$20.00 per hour
Variable overhead
$7.00 per hour
The company produced 5,200 units in January using 39,310 grams of direct material and 2,380 direct labor-hours. During the month, the company purchased 44,400 grams of the direct material at $1.70 per gram. The actual direct labor rate was $19.30 per hour and the actual variable overhead rate was $6.80 per hour.
The company applies variable overhead on the basis of direct labor-hours. The direct materials purchases variance is computed when the materials are purchased.
Required - Determine the variable overhead rate variance for January?
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