Handerson Corporation makes a product with the following
standard costs: Standard Quantity or Hours Standard Price or Rate
Direct materials 8.5 kilos $ 6.00 per kilo Direct labor 0.4 hours $
20.00 per hour Variable overhead 0.4 hours $ 6.00 per hour The
company reported the following results concerning this product in
August. Actual output 3,200 units Raw materials used in production
29,030 kilos Purchases of raw materials 31,600 kilos Actual direct
labor-hours 1,160 hours Actual cost of raw materials purchases $
195,920 Actual direct labor cost $ 22,736 Actual variable overhead
cost $ 7,540 The company applies variable overhead on the basis of
direct labor-hours. The direct materials purchases variance is
computed when the materials are purchased. The variable overhead
rate variance for August is:
