Brown Company produces fine leather footballs. The standard cost for each footba

Question

Brown Company produces fine leather footballs. The standard cost for each football is:
Direct material 2 feet of leather at $4.00/foot $8.00
Direct labor 1.5 hours at $12.00/hour $18.00

During February, 1,200 footballs were produced. 2,600 feet of leather were purchased at $4.25 per foot. Of this, 2,300 feet were used in production. Direct labor cost incurred was $20,930 for 1,820 hours.
Reference: Ref 11-2

What is the direct labor rate variance?
Answer


$900 favorable

$900 unfavorable

$910 favorable

$910 unfavorable

Explanation / Answer

Direct labor rate variance = (Actual Hours x Actual rate) - (Actual Hours - Standard Rate) = (1820 x 11.50) - (1820 x 12) = 20930 - 21840 = 910 (F) Answer $910 favorable

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