Wolery Inc. has provided the following data concerning one of the products in its standard cost system. The company has reported the following actual results for the product for April:
The labor rate variance for the month is closest to:
A) $2,576 U
B) $2,816 U
C) $2,816 F
D) $2,576 F

Question

Wolery Inc. has provided the following data concerning one of the products in its standard cost system.  The company has reported the following actual results for the product for April:
 The labor rate variance for the month is closest to:
A) $2,576 U 
B) $2,816 U 
C) $2,816 F 
D) $2,576 F

Quizplus · Accepted Answer

Labor rate variance = (AH × AR) − (AH × SR)
= AH × (AR - SR)
= 1,610 hours × ($23.30 per hour - $21.70 per hour)
= 1,610 hours × ($1.60 per hour)
= $2,576 U