Jefferson Co. uses the following standard to produce a single unit of its product: Variable overhead $6 (2 hrs. per unit @ $3/hr.). Actual data for the month show variable overhead costs of $150,000 and 24,000 units produced. The total variable overhead variance is:

A. 6,000F

B. 6,000U

C. 78,000U

D. 78000F

E 0.

B. 6,000U

Explanation:

The total variable overhead variance shall be calculated using the following formula:

Variable overhead variance = (Actual units produced*Standard hours per unit * Standard rate per hour) - (Actual variable production overhead cost of actual production)

Standard rate per hour=$3

Standard hours per unit=2

Actual units produced=24,000

Actual variable production overhead cost of actual production=$150,000

Variable overhead variance = (24,000*2*3-150,000)

= (144,000-150,000)

=$6,000U

So the answer is B. 6,000U