Question

Gilder Corporation makes a product with the following standard costs:

	Standard Quantity or Hours	Standard Price or Rate	Standard Cost Per Unit
Direct materials	7.70 grams	$5.00 per gram	$38.50
Direct labor	0.2 hours	$17.00 per hour	$3.40
Variable overhead	0.2 hours	$5.00 per hour	$1.00

The company reported the following results concerning this product in June.

Originally budgeted output	6,700	units
Actual output	6,800	units
Raw materials used in production	39,300	grams
Purchases of raw materials	44,300	grams
Actual direct labor-hours	500	hours
Actual cost of raw materials purchases	$260,340
Actual direct labor cost	$7,828
Actual variable overhead cost	$2,780

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:

$689 U

$672 U

$689 F

$672 F

Answer 1

Answer: Stand and Standard Labour Rate Howey Deu unit = 0.2 Howrs peu Howl - $17 peu Howe Actual Labour last Actual Direct Labour Therefore, = $7828 Hows - 500 Hours ! Sctuel Direct Labore Rate & Actual Actual Dineet Dineet Labour cost Labour Howes - 2 $7828 500 Howy - $ 15.656 pen Labour Hour Now, Labour Rate 7 Standand I hate Vaciane - Actual Rate / x Actual Howes wouked Hours = = ($17 - $15.656 ) x 500 $672. Labour standard, How rate is lowe therefore variance is live actual then the favourable Hence last option is connect ie. $ 672 F