The following data have been provided by Liggett Corporation: Budgeted production 7,400 units Standard machine-hours per unit 6.6 machine-hours Standard lubricants rate $ 3.50 per machine-hour Standard supplies rate $ 2.00 per machine-hour Actual production 7,600 units Actual machine-hours (total) 49,840 machine-hours Actual lubricants cost (total) $ 179,821 Actual supplies cost (total) $ 98,933 Lubricants and supplies are both elements of variable manufacturing overhead. The variable overhead rate variance for lubricants is closest to:

Multiple Choice

a. $1,120 F

b. $5,381 F

c. $4,261 U

d. $5,381 U

Question

Business

Juliet

2 March, 12:23

The following data have been provided by Liggett Corporation: Budgeted production 7,400 units Standard machine-hours per unit 6.6 machine-hours Standard lubricants rate $ 3.50 per machine-hour Standard supplies rate $ 2.00 per machine-hour Actual production 7,600 units Actual machine-hours (total) 49,840 machine-hours Actual lubricants cost (total) $ 179,821 Actual supplies cost (total) $ 98,933 Lubricants and supplies are both elements of variable manufacturing overhead. The variable overhead rate variance for lubricants is closest to:

Multiple Choice

a. $1,120 F

b. $5,381 F

c. $4,261 U

d. $5,381 U

+2

Answers (1)

Know the Answer?

Jaylah Villarreal · Answer 1

The correct answer is D.

Explanation:

Giving the following information:

Budgeted production 7,400 units Standard machine-hours per unit 6.6 machine-hours Standard lubricants rate $ 3.50 per machine-hour

Actual production 7,600 units Actual machine-hours (total) 49,840 machine-hours Actual lubricants cost (total) $ 179,821

Manufacturing overhead spending variance = (standard rate - actual rate) * actual quantity

Manufacturing overhead spending variance = (3.5 - 3.607965) * 49,840 = 5,381 unfavorable