Question

Hurren Corp. makes a product with the following standard costs per unit of output: Standard Quantity Standard Price Direct materials 4.4 grams $8 per gram Direct labor 0.7 hours $19 per hour The company reported the following results concerning this product in June: Master budget output 6,600 units Actual output 6,500 units Purchases of raw materials 31,800 grams Raw materials used in production 28,380 grams Actual price of raw materials purchased $8.10 per gram Actual labor hours 4,500 hours Actual labor rate $19.90 per hour The labor rate variance for June is:

Answer 1

the labor rate variance is $4,050 unfavorable

Step-by-step explanation:

The computation of the labor rate variance is shown below:

= Actual hours × (standard rate - actual rate)

= 4,500 hours × ($19 per hour - $19.90 per hour)

= $4,050 unfavorable

Hence, the labor rate variance is $4,050 unfavorable