Question

Anemone Company produces picture frames. During the year, 200,000 picture frames were produced. Materials and labor standards for producing the picture frames are as follows: Direct materials (2 pieces of wood @ $3) $6.00 Direct labor (2 hours @ $12) $24.00 Anemone purchased and used 600,000 pieces of wood at $4.00 each, and its actual labor hours were 320,000 hours at a wage rate of $13. What is Anemone's labor rate variance? a.$660,500 F b.$450,000 F c.$320,000 U d.$445,000 U

Answer 1

Labour rate variance

= (Standard rate - Actual rate) x Actual hours worked

= ($12 - $13) x 320,000 hours

= $320,000(U)

The correct answer is C

Step-by-step explanation:

Labour rate variance is the difference between standard labour rate and actual labour rate multiplied by actual labour hours worked.