The Fellowes Company has developed standards for labor.During June,75 units were scheduled and 100 were produced.Data related to labor are:
$$\begin{array} { | l | l | }
\hline \text { Standard hours allowed } & 3 \text { hours per unit } \
\hline \text { Standard wages allowed } & \$ 4.00 \text { per hour } \
\hline \text { Actual direct labor } & 310 \text { hours (total cost } \$ 1,209 \text { ) } \
\hline
\end{array}$$What is the labor rate variance for June?
A) $30 unfavorable.
B) $31 favorable.
C) $31 unfavorable.
D) $30 favorable.

Question

The Fellowes Company has developed standards for labor.During June,75 units were scheduled and 100 were produced.Data related to labor are: 
$$\begin{array} { | l | l | } 
\hline \text { Standard hours allowed } & 3 \text { hours per unit } \
\hline \text { Standard wages allowed } & \$ 4.00 \text { per hour } \
\hline \text { Actual direct labor } & 310 \text { hours (total cost } \$ 1,209 \text { ) } \
\hline
\end{array}$$What is the labor rate variance for June?
A) $30 unfavorable.
B) $31 favorable.
C) $31 unfavorable.
D) $30 favorable.

Quizplus · Accepted Answer

The labor rate variance is calculated as (Actual Hours x Actual Rate) - (Actual Hours x Standard Rate). The actual rate is $1,209 / 310 hours = $3.90 per hour. The standard rate is $4.00 per hour. The variance is 310 hours x ($3.90 - $4.00) = $31 favorable.

The Fellowes Company Has Developed Standards for Labor What Is the Labor Rate Variance for June? A) $30

The Fellowes Company Has Developed Standards for Labor What Is the Labor Rate Variance for June?
A) $30