Pikus Corporation makes a product that has the following direct labor standards: In January the company's budgeted production was 3,400 units, but the actual production was 3,500 units. The company used 640 direct labor-hours to produce this output. The actual direct labor cost was $8,960.
-The labor rate variance for January is:
A)$700 F
B)$640 U
C)$640 F
D)$700 U

Question

Pikus Corporation makes a product that has the following direct labor standards:  In January the company's budgeted production was 3,400 units, but the actual production was 3,500 units. The company used 640 direct labor-hours to produce this output. The actual direct labor cost was $8,960.
-The labor rate variance for January is:
A)$700 F 
B)$640 U 
C)$640 F 
D)$700 U

Quizplus · Accepted Answer

Labor rate variance = (AQ F1F1F1S1F1F1F10 AP)- (AQ F1F1F1S1F1F1F10 SP)
= $8,960 - (640 hours F1F1F1S1F1F1F10 $15.00 per hour)
= $8,960 - $9,600 = $640 F

Pikus Corporation Makes a Product That Has the Following Direct