Berends Corporation makes a product with the following standard costs: The compa

Question

Berends Corporation makes a product with the following standard costs:

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

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 April is:

Question options:

$4,224 F

$4,224 U

$4,096 U

$4,096 F

Standard Quantity or Hours Standard Price or Rate Direct materials 9.2 pounds $3.00 per pound Direct labor 0.3 hours $17.00 per hour Variable overhead 0.3 hours $3.00 per hour

Explanation / Answer

(Actual rate - Standard rate) x Actual hours worked = Labor rate variance

=$39,424/2,560-17.00)*2,560=$4,096 U

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