Saxena Corporation makes a product that has the following direct labor standards: The company budgeted for production of 2,900 units in July, but actual production was 2,800 units. The company used 250 direct labor-hours to produce this output. The actual direct labor rate was $14.10 per hour.
The labor rate variance for July is:
A) $252 U
B) $225 U
C) $225 F
D) $252 F

Question

Saxena Corporation makes a product that has the following direct labor standards:  The company budgeted for production of 2,900 units in July, but actual production was 2,800 units. The company used 250 direct labor-hours to produce this output. The actual direct labor rate was $14.10 per hour.
The labor rate variance for July is:
A) $252 U 
B) $225 U 
C) $225 F 
D) $252 F

Quizplus · Accepted Answer

Labor rate variance = AH × (AR − SR)
= 250 hours × ($14.10 per hour − $15.00 per hour)
= 250 hours × (-$0.90 per hour)
= $225 F

Saxena Corporation Makes a Product That Has the Following Direct