Standard Standard Quantity or Standard Price or Cost Per Rate Unit Direct materi

Question

Standard Standard Quantity or Standard Price or Cost Per Rate Unit Direct materials Direct labor Variable overhead Hours 6.4 ounces 0.4 hours 0.4 hours 3.00 per ounce $19.20 $ 5.20 $ 2.00 $13.00 per hour $5.00 per hour The company reported the following results concerning this product in February Originally budgeted output Actual output Raw materials used in production Actual direct labor-hours Purchases of raw materials Actual price of raw aterials Actual direct labor rate Actual variable overhead rate 4,800 units 4,900 units 30,230 ounces 1,910 hours 32,600 ounces $ 2.90 per ounce $ 12.40 per hour $4.90 per hour 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 February is

Explanation / Answer

Std labour hour per unit of output: 0.40 hour per unit Std labouor hours allowed for actual output (4900 units*0.40): 1960 hours Actual hours:1910 hours Std rate per hour: $ 13 per hour Actual rate per hour: $12.40 per hour labor rate variance: Actual hours worked ( Std rate per hor-Actual labour rate per hour) 1910 hours ( 13.00 -12.40 ) = $1146 F

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