Question

Use this information for Harry Company to answer the question that follow. The following data are given for Harry Company: Budgeted production 1,033 units Actual production 957 units Materials: Standard price per ounce $1.823 Standard ounces per completed unit 12 Actual ounces purchased and used in production 11,829 Actual price paid for materials $24,249 Labor: Standard hourly labor rate $14.02 per hour Standard hours allowed per completed unit 4.1 Actual labor hours worked 4,929 Actual total labor costs $80,096 Overhead: Actual and budgeted fixed overhead $1,106,000 Standard variable overhead rate $26.00 per standard labor hour Actual variable overhead costs $138,012 Overhead is applied on standard labor hours. (Round interim calculations to the nearest cent.) The direct labor rate variance is a. $10,991.67 favorable b. $25,085.73 unfavorable c. $10,991.67 unfavorable d. $25,085.73 favorable

Answer 1

Correct answer---(C) $10991.67

Working

Labor Rate Variance
(	Standard Rate	-	Actual Rate	)	x	Actual Labor Hours
(	$                     14.02	-	$                    16.25	)	x	4929
	-10991.67
	Variance		$            10,991.67			Unfavourable-U

Standard DATA for		957	Units
	Quantity (SQ)	Rate (SR)	Standard Cost
	[A]	[B]	[A x B]
Direct labor	( 4.1 hours of direct labor x 957 Units)=3923.7 hours of direct labor	$    14.02	$       55,010.27
Variable Overhead	( 0.15 Hours x 957 Units)=143.55 Hours	$      8.00	$          1,148.40

Actual DATA for		957	Units
	Quantity (AQ)	Rate (AR)	Actual Cost
Direct labor	4929	$   16.25	$      80,096.00