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25 April, 02:15

Hardigree Corporation makes a product that has the following direct labor standards:

Standard direct labor-hours 0.3 hours per unit

Standard direct labor rate $ 23.00 per hour

In May the company's budgeted production was 8,900 units, but the actual production was 8,800 units. The company used 2,820 direct labor-hours to produce this output. The actual direct labor cost was $70,218.

The labor rate variance for May is:

(A) $5,016 U

(B) $5,358 U

(C) $5,016 F

(D) $5,358 F

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Answers (1)
  1. 25 April, 04:40
    0
    The correct answer is B.

    Explanation:

    Giving the following information:

    Hardigree Corporation makes a product that has the following direct labor standards:

    Standard direct labor-hours 0.3 hours per unit

    Standard direct labor rate $ 23.00 per hour

    In May the company's budgeted production was 8,900 units, but the actual production was 8,800 units. The company used 2,820 direct labor-hours to produce this output. The actual direct labor cost was $70,218.

    Actual rate = 70,218/2,820 = 24.9

    Direct labor price variance = (Standard Rate - Actual Rate) * Actual Quantity

    Direct labor price variance = (23 - 24.9) * 2,820 = 5,358 unfavorable
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