Bumgardner Inc. has provided the following data concerning one of the products in its standard cost system.
The company has reported the following actual results for the product for April:

-The labor rate variance is:
A) $625 U
B) $500 F
C) $500 U
D) $625 F

Question

Bumgardner Inc. has provided the following data concerning one of the products in its standard cost system.
  The company has reported the following actual results for the product for April:
 
-The labor rate variance is:
A) $625 U 
B) $500 F 
C) $500 U 
D) $625 F

Quizplus · Accepted Answer

AH × AR = $20,625
Labor rate variance = (AH × AR) − (AH × SR)
= ($20,625) − (2,500 hours × $8.00 per hour)
= $20,625 − $20,000
= $625 U