Hardigree Corporation makes a product that has the following direct labor standards:
In May the company's budgeted production was 8,900 units, but the actual production was 8,800 units. The company used 2,820 direct labor-hours to produce this output. The actual direct labor cost was $70,218.
-The labor rate variance for May is:
A) $5,016 U
B) $5,358 U
C) $5,016 F
D) $5,358 F

Question

Hardigree Corporation makes a product that has the following direct labor standards:
  In May the company's budgeted production was 8,900 units, but the actual production was 8,800 units. The company used 2,820 direct labor-hours to produce this output. The actual direct labor cost was $70,218.
-The labor rate variance for May is:
A) $5,016 U 
B) $5,358 U 
C) $5,016 F 
D) $5,358 F

Quizplus · Accepted Answer

AH × AR = $70,218
Labor rate variance = (AH × AR) − (AH × SR)
= ($70,218) − (2,820 hours × $23.00 per hour)
= $70,218 − $64,860
= $5,358 U

Hardigree Corporation Makes a Product That Has the Following Direct