The Geurtz Company uses standard costing. The company makes and sells a single p

Question

The Geurtz Company uses standard costing. The company makes and sells a single product called a Roff. The following data are for the month of August:

$8,190 unfavorable

$2,190 favorable

$8,190 favorable

$2,190 unfavorable

• Actual cost of direct material purchased and used: $82,680 • Material price variance: $3,180 unfavorable • Total materials variance: $21,180 unfavorable • Standard cost per pound of material: $5 • Standard cost per direct labor-hour: $5 • Actual direct labor-hours: 11,700 hours • Labor efficiency variance: $3,000 favorable • Standard number of direct labor-hours per unit of Roff: 3 hours • Total labor variance: $5,190 unfavorable

Explanation / Answer

Solution:

Total labor variance = $5,190 U

Labor efficiency variance = $3,000 F

Total labor variance = Labor efficiency variance + Labor rate variance

$5,190 U = $3,000 F + Labor rate variance

Labor rate variance = -$5,190 - $3,000 = $8,190 U

Hence first option is correct.

Related Questions

Navigate

• Browse (All)
• Browse T
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.