Fender Corporation
Fender Corporation produced 100 units of Product XX. The total standard and actual costs for materials and direct labour for the 100 units of Product XX are as follows: $\begin{array}{ll}
&&\underline{\text { Standard}} &\underline{\text { Actual }}\
\underline{\text { Materials}}\
\text { Standard: } & 200 \mathrm{~kg} \text { at } \$ 3.00 \text { per kilogram }&\$600 \
\text { Actual: } & 220 \mathrm{~kg} \text { at } \$ 2.85 \text { per kilogram }&&\$627\
\
\underline{\text { Direct labour}}\
\text { Standard: } & 400 \text { hours at } \$ 15.00 \text { per hour } & 6,000 \
\text { Actual: } & 368 \text { hours at } \$ 16.50 \text { per hour } &&6,072
\end{array}$
-Refer to Perfect Builders. What was the labour rate variance?
A) $240,000 U
B) $240,000 F
C) $280,000 U
D) $280,000 F

Question

Fender Corporation
Fender Corporation produced 100 units of Product XX. The total standard and actual costs for materials and direct labour for the 100 units of Product XX are as follows: $\begin{array}{ll}
 &&\underline{\text { Standard}} &\underline{\text {  Actual }}\ 
 \underline{\text { Materials}}\
\text { Standard: } & 200 \mathrm{~kg} \text { at } \$ 3.00 \text { per kilogram }&\$600 \
\text { Actual: } & 220 \mathrm{~kg} \text { at } \$ 2.85 \text { per kilogram }&&\$627\
\
 \underline{\text { Direct labour}}\
\text { Standard: } & 400 \text { hours at } \$ 15.00 \text { per hour } & 6,000 \
\text { Actual: } & 368 \text { hours at } \$ 16.50 \text { per hour } &&6,072 
\end{array}$ 
-Refer to Perfect Builders. What was the labour rate variance?
A) $240,000 U
B) $240,000 F
C) $280,000 U
D) $280,000 F

Quizplus · Accepted Answer

To calculate the labour rate variance, we need to find the difference between the actual labour rate and the standard labour rate, and then multiply it with the actual labour hours.

The standard labour rate per unit for Product XX can be calculated as:
Total standard labour cost / Total standard labour hours
= ($420,000 + $60,000) / (10,000 + 1,500)
= $39 per labour hour

The actual labour rate per unit for Product XX can be calculated as:
Total actual labour cost / Total actual labour hours
= ($450,000 + $75,000) / (9,500 + 2,000)
= $44 per labour hour

The labour rate variance can be calculated as:
Labour rate variance = (Actual labour rate - Standard labour rate) x Actual labour hours
= ($44 - $39) x 11,500
= $57,500 U

Therefore, the correct answer is C) $280,000 U, which is the closest option to $57,500 U.

Fender Corporation Fender Corporation Produced 100 Units of Product XX

Fender Corporation
Fender Corporation Produced 100 Units of Product XX