Miguez Corporation makes a product with the following standard costs: Standard Quantity orHoursStandard Price orRateStandard Cost Per UnitDirect materials 2.8?liters$7.50?per liter$21.00? Direct labor 0.5?hours$27.00?per hour$13.50? Variable overhead 0.5?hours$2.50?per hour$1.25? The company budgeted for production of 3100 units in September, but actual production was 3000 units. The company used 5940 liters of direct material and 1730 direct labor-hours to produce this output. The company purchased 6300 liters of the direct material at $7.70 per liter. The actual direct labor rate was $29.10 per hour and the actual variable overhead rate was $2.40 per hour.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 September is:
A. $150 U
B. $173 F
C. $150 F
D. $173 U
Answer: B
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