The Richie Company uses a standard costing system in which variable manufacturing overhead is assigned to production on the basis of the number of machine setups. Data for the month of October include the following:
Variable manufacturing overhead cost incurred: $39,364
Total variable manufacturing overhead variance: $5,350 favorable
Standard machine setups allowed for actual production: 2,830 setups
Actual machine setups incurred: 2,760 setups
The standard variable overhead rate per machine setup is:
$12.05
$15.80
$16.20
$14.26