Milar Corporation makes a product with the following standard costs: Standard Quantity or Hours Standard Price or
Question:
Milar Corporation makes a product with the following standard costs:
Standard Quantity or Hours | Standard Price or | |||||
Direct materials | 13.5 | pounds | $ | 13.00 | per pound | |
Direct labor | 0.8 | hours | $ | 39.00 | per hour | |
Variable overhead | 0.8 | hours | $ | 18.50 | per hour | |
In January the company produced 3,500 units using 14,000 pounds of the direct material and 2,920 direct labor-hours. During the month, the company purchased 16,900 pounds of the direct material at a cost of $14,760. The actual direct labor cost was $113,461 and the actual variable overhead cost was $51,828.
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 January is:
a. $419 F
b. $419 U
c. $4,261 U
d. $4,261 F
Managerial Accounting
ISBN: 978-0697789938
13th Edition
Authors: Ray H. Garrison, Eric W. Noreen, Peter C. Brewer