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 $24.00 Direct labor (2 hours e $12) 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. $320,000 U Ob. $660,500 F O c. $450,000 F Od. $445,000 u

Answer 1

Answer:

The correct answer is A.

Explanation:

Giving the following information:

During the year, 200,000 picture frames were produced.

Materials and labor standards for producing the picture frames are as follows:

Direct labor (2 hours e $12)

Its actual labor hours were 320,000 hours at a wage rate of $13.

We need to use the following formula:

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

Direct labor rate variance= (12 - 13)*320,000= $320,000 unfavorable