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Midgley Corporation makes a product whose direct labor standards are 2.1 hours per unit and $22.00 per hour. In April, the company produced 6,200 units using 12,780 direct labor-hours. The actual direct labor cost was $269,020. The labor rate variance for April is:
(A) $5,280 U
(B) $5,280 F
(C) $5,199 F
(D) $5,308 U

Respuesta :

Answer:

$12,140 Favorable

Not in option

Explanation:

Actual rate per hour of labor = $269,020/12,780 hours = $21.05

Standard Rate provided = $22.00

Labor Rate Variance = (Standard Rate - Actual Rate) [tex]\times[/tex] Actual Hours

Here, Actual Hours = 12,780

Therefore, Labor Rate Variance = ($22 - $21.05) [tex]\times[/tex] 12,780

= $12,140 Favorable as actual rate is less than standard rate.

The options provided are not correct.

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