Strong Manufacturing The following information is available for Strong Manufacturing Company for the month of June when the company produced 2,100 units:
$\begin{array}{ll}\text { Standard: }\
\text { Material } & 2 \text { pounds per urit } @ \$ 5.80 \text { per pound } \
\text { Labor } & 3 \text { direct labor hours per urit @ } \$ 10.00 \text { per hour }\\\text { Actual: }\
\text { Material } & 4,250 \text { pounds purchased and used @ } \$ 5.65 \text { per pound } \
\text { Labor } & 6,300 \text { directlabor hours at } \$ 9.75 \text { per hour }
\end{array}$ Refer to Strong Manufacturing Company.What is the labor rate variance?
A)$1,575 U
B)$1,575 F
C)$1,594 U
D)$0

Question

Quizplus · Accepted Answer

The labor rate variance is calculated as (Actual Hourly Rate - Standard Hourly Rate) x Actual Hours Worked. Here, it is ($9.75 - $10.00) x 6,300 = $1,575 Favorable (F).

Strong Manufacturing the Following Information Is Available for Strong Manufacturing