Warp Manufacturing Corporation uses a standard cost system for the production of its ski lift chairs. Warp uses machine-hours as an overhead base. The variable manufacturing overhead standards for each chair are 1.2 machine-hours at a standard cost of $18 per hour. During the month of September, Warp incurred 34,000 machine-hours in the production of 32,000 ski lift chairs. The total variable manufacturing overhead cost was $649,400. What is Warp's variable overhead rate variance for September

$37,400 unfavorable

Explanation:

Calculation to determine Warp's variable overhead rate variance for September

Using this formula

Variable overhead spending variance = (Actual hours × Actual rate) − (Actual hours × Standard rate)

Let plug in the formula

Variable overhead spending variance = $649,400 − (34,000 × $18)

Variable overhead spending variance = $37,400 unfavorable

Therefore Warp's variable overhead rate variance for September is $37,400 unfavorable

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