Oddo Corporation makes a product with the following standard costs: The company

Question

Oddo Corporation makes a product with the following standard costs:

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

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 December is:

$5,372 F

$4,998 U

$5,372 U

$4,998 F

Standard Quantity or Hours Standard Price or Rate Standard Cost Per Unit Direct materials 3.0 ounces $7.00 per ounce $21.00 Direct labor 0.7 hours $20.00 per hour $14.00 Variable overhead 0.7 hours $5.00 per hour $3.50

Explanation / Answer

$5,372 F Particulars Standard Actual Qty Rate amount Qty Rate amount Materials            12,600.00                      7.00            88,200.00            14,500.00                      6.80            98,600.00 Labour              2,940.00               20.0000            58,800.00              3,160.00                    18.30            57,828.00 Actual output              4,200.00 Materials reqd(4,200*3)            12,600.00 Labour hrs reqd(4,200*7)              2,940.00 DLRV= (SR-AR)AH DLRV= (20 - 18.30)3,160 DLRV= 5,372 F

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