Chapter 10 Standard Costs and Variances
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92. The variable overhead rate variance for August is:
Sande Corporation makes a product with the following standard costs:
In November the company’s budgeted production was 2,900 units but the actual production
was 3,000 units. The company used 27,670 grams of the direct material and 1,390 direct
labor-hours to produce this output. During the month, the company purchased 31,700 grams
of the direct material at a cost of $196,540. The actual direct labor cost was $29,607 and the
actual variable overhead cost was $2,502.
The company applies variable overhead on the basis of direct labor-hours. The direct
materials purchases variance is computed when the materials are purchased.