haraldson Corporation makes a product with the following standard costs: standar

Question

haraldson Corporation makes a product with the following standard costs: standard Quantity Standard Price Standard Cost or Hours or Rate Per Unit Direct materials 7.1 $ 4.00 per $28.40 ounces ounce Direct labor Variable overhead0.2 hours $ 11.00 per hour2.20 .80 0.2 hours s4.00 per hour The company reported the following results concerning this product in June 2,500 units 3,000 units 21, 500 ounces 19,400 ounces Originally budgeted output Actual output Raw materials used in production Purchases of raw materials Actual direct labor-hours Actual cost of raw materials purchases Actual direct labor cost Actual variable overhead cost 560 hours s 45, 100 $ 12,500 s 3, 250 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:

Explanation / Answer

Calculate labour rate variance :

Labour rate variance = (standard rate-actual rate)actual hours

                              = (11*560-12500)

Labour rate variance = 6340 U

so answer is b) $6340 U

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