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Sagnik B.

asked • 01/04/15

Variable Overhead Rate Variance Accounting Question Need Help

Thomas Corporation uses a standard costing system in which variable manufacturing overhead is assigned to production on the basis of number of machine hours. The following data pertain to one month's operations :
Variable Manufacturing Overhead Cost Incurred : $70,000
Variable Overhead Spending Variance : $4,550 Favorable
Standard Machine Hours allowed for actual production : 3,550
Actual Machine Hours Incurred : 4,000
Question : The variable overhead rate variance is :
A) 3,746 Unfavorable B) 3,746 Favorable C) 14,000 Unfavorable D) 14,000 Favorable E) Undeterminable
Answer was D) but I need help with steps as to how.

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