Biology Forums - Study Force

Vermeillen Corporation uses a standard costing system in which variable manufacturing overhead is assigned to production on the basis of the number of machine setups. The following data pertain to one month's operations:

• Variable manufacturing overhead cost incurred: $70,000
• Total variable manufacturing overhead variance: $4,550 Favorable
• Standard machine setups allowed for actual production: 3,550
• Actual machine setups incurred: 3,500

The variable overhead rate variance is:

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$1,000 Favorable

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$1,000 Unfavorable

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$3,500 Unfavorable

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$3,500 Favorable

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