Question

Use the following data to find the direct labor rate variance if the company produced 6,200...

Use the following data to find the direct labor rate variance if the company produced 6,200 units of product during the period.

Standard:

Direct labor (3.5 hrs. per unit @ $7/hr.)

$ 24.50 per unit
Actual cost incurred:

Direct labor (22,800 hrs. @ $7.7/hr.)

$ 175,560

Multiple Choice

  • $15,960 unfavorable.

  • $7,700 unfavorable.

  • $7,700 favorable.

  • $15,960 favorable.

  • $23,660 favorable.

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Answer #1

Labor rate variance

= (SR - AR) *AH

= (7 - 7.7) * 22,800

= 15,960 Unfavorable

Option A is the answer

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