Tharaldson Corporation makes a product with the following standard costs: ...
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Accounting
Tharaldson Corporation makes a product with the following standard costs:
Standard Quantity or Hours
Standard Price or Rate
Standard Cost Per Unit
Direct materials
5.6
ounces
$
3.00
per ounce
$
16.80
Direct labor
0.3
hours
$
10.00
per hour
$
3.00
Variable overhead
0.3
hours
$
7.00
per hour
$
2.10
The company reported the following results concerning this product in June.
Originally budgeted output
4,000
units
Actual output
4,000
units
Raw materials used in production
23,000
ounces
Purchases of raw materials
23,500
ounces
Actual direct labor-hours
540
hours
Actual cost of raw materials purchases
$
42,700
Actual direct labor cost
$
14,000
Actual variable overhead cost
$
4,000
The company applies variable overhead on the basis of direct labor-hours. The direct materials purchases variance is computed when the materials are purchased.
The labor rate variance for June is:
Multiple Choice
$1,651 F
$8,600 F
$1,651 U
$8,600 U
Answer & Explanation
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