Question

Kartman Corporation makes a produ in Corporation makes a product with the following standards Direct materials Direct labor Variable overhead Standard Quantity or Hours 6.5 pounds 0.6 hours 0.6 hours Standard Cost Standard Price or Rate Per Unit $ 7.00 per pound $ 45.50 $ 24.00 per hour $ 1440 $ 4.00 per hour $ 2.40 In June the company's budgeted production was 3.400 units but the actual production was 30 units. The company used 22,150 pounds of the direct material and 2290 direct labot-kausto produce this output. During the month, the company purchased 25,400 pounds of the direct material at a cost of $170,180. The actual direct labor cost was $57,021 and the actual variable overhead cost was $8,931. The company applies variable overhead on the basis of direct labor-hours. The direct materials purchases variance is computed when the materials are purchased.

the labor rate variance for june is

Answer 1

Labor Rate variance = Actual direct labor cost - [Actual hours * standard labor rate per hour]

                   = 57021 - [2290 * *24)

                    = 57021 - 54960

                   = 2061 U