Use the information below to answer the following question(s).A company makes table lamps, for which the following standards have been developed:
During January, production of 100 lamps was expected, but 110 lamps were actually completed.Direct materials purchased and used were 2,100 kilograms at an actual price of $2.20 per kilogram.Direct labour cost for the month was $5,310, and the actual pay per hour was $9.00.
-The direct-material rate variance for January is
A)$420 unfavourable.
B)$420 favourable.
C)$400 favourable.
D)$400 unfavourable.
E)$20 favourable.

Question

Use the information below to answer the following question(s).A company makes table lamps, for which the following standards have been developed:
  During January, production of 100 lamps was expected, but 110 lamps were actually completed.Direct materials purchased and used were 2,100 kilograms at an actual price of $2.20 per kilogram.Direct labour cost for the month was $5,310, and the actual pay per hour was $9.00.
-The direct-material rate variance for January is
A)$420 unfavourable. 
B)$420 favourable. 
C)$400 favourable. 
D)$400 unfavourable. 
E)$20 favourable.

Quizplus · Accepted Answer

The direct-material rate variance is calculated as the difference between the actual rate paid and the standard rate. In this case, the actual rate paid is $10.20 per hour and the standard rate is $10.00 per hour. The difference is $0.20 per hour, which is unfavourable. The total unfavourable variance is $0.20 per hour x 2,100 hours = $420.

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