Polaco Corporation makes a product that has the following direct labor standards: In May the company produced 8,500 units using 3,220 direct labor-hours. The actual direct labor rate was $22.10 per hour.
The labor rate variance for May is:
A) $6,460 U
B) $6,118 U
C) $6,118 F
D) $6,460 F

Question

Polaco Corporation makes a product that has the following direct labor standards:  In May the company produced 8,500 units using 3,220 direct labor-hours. The actual direct labor rate was $22.10 per hour.
The labor rate variance for May is:
A) $6,460 U 
B) $6,118 U 
C) $6,118 F 
D) $6,460 F

Quizplus · Accepted Answer

Labor rate variance = (AH × AR) − (AH × SR)
= (3,220 hours × $22.10 per hour) − (3,220 hours × $24.00 per hour)
= $71,162 − $77,280
= $6,118 F

Polaco Corporation Makes a Product That Has the Following Direct