TB MC Qu. 10-141 Tharaldson Corporation makes... Tharaldson Corporation makes a
ID: 2581171 • Letter: T
Question
TB MC Qu. 10-141 Tharaldson Corporation makes... Tharaldson Corporation makes a product with the following standard costs Standard Quantity or Hours 6.3 ounces 0.4 hours 0.4 hours Standard Standard Price or Cost Per Direct materials Direct labor Variable overhead Rate $ 2.00 per ounce $ 11.00 per hour $ 6.00 per hour Unit $12.66 $ 4.40 $ 2.40 The company reported the following results concerning this product in June 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 3,300 units 2,600 units 21, 300 ounces 22,480 ounces 470 hours $ 42,00e $ 13,30e $ 3,65e 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 isExplanation / Answer
Calculation of Direct labor rate variance
= ( Standard labor rate per hr X Actual labor hours ) - Actual Direct labor cost
= ( $ 11.00 X 470 hrs ) - $ 13,300
= $ 5,170 - $ 13,300
= $ 8,130.00 Unfavourable
So Answer is $ 8,130 U
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