Academic Integrity: tutoring, explanations, and feedback — we don’t complete graded work or submit on a student’s behalf.

Gilder Corporation makes a product with the following standard costs: The compan

ID: 2472979 • Letter: G

Question

Gilder Corporation makes a product with the following standard costs:
  


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


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:

Standard Quantity or
Hours
Standard Price or
Rate
Standard Cost Per
Unit
Direct materials 7.6 grams $6.00 per gram $45.60 Direct labor 0.1 hours $16.00 per hour $1.60 Variable overhead 0.1 hours $6.00 per hour $0.60

Explanation / Answer

SRSH                                                                   SRAH                                                                  ARAH

16 x 550                                                               16 x 510                                                              $ 7,803

= $ 8,800                                                            = $ 8,160                                                

SR = Standard rate per labor hour

SH= Standard hours required for actual production

                = 0.1 x 5,550 = 550 hours

AH = Actual hours worked = 510 hours

ARAH = Actual labor cost = $ 7803

AR =Actual rate = ARAH/AH = $ 7,803/510 = $ 15.3

Labor rate variance = SRAH –ARAH = $ 8,160 – $ 7,803

                                        = $ 357

The labor rate variance for June is: $ 357

Hire Me For All Your Tutoring Needs
Integrity-first tutoring: clear explanations, guidance, and feedback.
Drop an Email at
drjack9650@gmail.com
Chat Now And Get Quote