Tharaldson Corporation makes a product with the following standard costs: Standa

Question

Tharaldson Corporation makes a product with the following standard costs: Standard Standard Quantity or Standard Price or Cost Per Unit Hours 5.8 ounces 0.5 hours 0.5 hours Rate Direct materials Direct labor Variable overhead $12.00 per hour $ 5.00 per hour $ 3.00 per ounce17.40 $ 6.00 $ 2.50 The company reported the following results concerning this product in June. Oriqinally budgeted output Actual output Raw materials used in production Purchases of raw materials Actual direct labor-hours Actual cost of raw materials purchases Actual direct labor cost Actual variable overhead cost 3,800 units 3,400 units 20,800 oun ces 21,900 ounces 520 hours $ 42,500 $ 13,800 $ 3,900

Explanation / Answer

Labor rate variance = 13800-(520*12)= 7560 U

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