Reference no: EM132752818

The Upton Company employs a standard costing system in which variable overhead is assigned to production based on direct labour hours. Data for the month of February include the following:

1. Variable manufacturing overhead cost incurred: $48,700
2. Total variable overhead variance: $300 F
3. Standard hours allowed for actual production: 7,000
4. Actual direct labour hours worked: 6,840

Problem 1: The standard variable overhead rate per direct labour hour is:

Multiple Choice

Option 1: $6.91.
Option 2: $6.95.
Option 3: $7.00.
Option 4: $7.12.