Problem
A manufacturing company that has only one product has established the following standards for its variable manufacturing overhead. Variable manufacturing overhead standards are based on machine-hours.
Standard hours per unit of output 3.40 machine-hours
Standard variable overhead rate $10.75 per machine-hour
The following data pertain to operations for the last month:
Actual hours 9,200 machine-hours
Actual total variable manufacturing overhead cost $95,800
Actual output 2,500 units
What is the variable overhead rate variance for the month?