Handerson Corporation makes a product with the following standard costs: Standard Quantity or HoursStandard Price or RateDirect materials 8.5kilos$6.00per kiloDirect labor 0.4hours$20.00per hourVariable overhead 0.4hours$6.00per hourThe company reported the following results concerning this product in August. Actual output 3,200unitsRaw materials used in production 29,030kilosPurchases of raw materials 31,600kilosActual direct labor-hours 1,160hoursActual 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:
A. $640 F
B. $580 F
C. $580 U
D. $640 U
Answer: C
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