Gilder Corporation makes a product with the following standard costs Direct mate

Question

Gilder Corporation makes a product with the following standard costs Direct materials Direct labor Variable overhend 6.90 grams 0.15 hours 015 hour 13.00 per grom $1900 per hour $ 600 per hour $8970 $2.85 $0.90 The company reported the following results concerning this product in June Originally budgeted output Actual output Raw materials used in production Purchoses of raw materials Actual direct lebor-hours Actual cost of raw meterials purchases Actual direct labor cost Actual variable overhead cost 3.900 units 4140 units 26,368 grams 29,768 grams 550 hours $375.080 $10.010 $2.074 The company applies variable overhead on the basis of direct labor-hours. The direct materials purchases varlance is computed when the matenials The labor rate varlance for June iS purchases varlance is computed when the materials are purchased O $468 O $440F O $440 U O $468 U

Explanation / Answer

Calculation of labor rate variance: Standard rate= $19 per hours Actual rate=10010/550=$18.20 per hour Actual hours=550 Labor rate variance= (Standard rate-actual rate)*actual hours                                       =(19-18.20)*550= 0.80*550=440 So correct answer is $440 F

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