Question

Dibert Inc. has provided the following data concerning one of the products in its standard cost system.Inputs Standard Quantity or Hours per Unit of Output Standard Price or RateDirect labor 0.70 hours $20.40 per hourThe company has reported the following actual results for the product for February:Actual output 5,100unitsActual direct labor-hours 3,380hoursActual direct labor cost $74,698 The labor rate variance for the month is closest to:a. $6,069 Ub. $6,069 Fc. $5,746 Ud. $5,746 F

Answer 1

Answer:

Option (C) is correct.

Explanation:

Actual output = 5100 units

Actual direct labor-hours = 3,380 hours

Actual direct labor cost = $74,698

The  labor rate variance:

= (Actual Hours × Actual rate ) - ( Actual Hours × Standard Rate)

= $74,698 - ( 3,380 Hours × $20.40 Per Hour)

= $74,698 - $68,952

= $5,746 U

Since, the Actual is more than the Standard, the Variance is Unfavorable

Hence, the correct answer is $ 5,746 U