Jackson Industries uses a standard cost system in which direct materials inventory is carried at standard cost.Jackson has established the following standards for one unit of product. During May, Jackson purchased 125, 000 pounds of direct material at a total cost of $475, 000.The total factory wages for May were $364, 000, 90 percent of which were for direct labor.Jackson manufactured 22, 000 units of product during May using 108, 000 pounds of direct material and 28, 000 direct labor-hours. The labor rate variance for May is:

Question

Jackson Industries uses a standard cost system in which direct materials inventory is carried at standard cost.Jackson has established the following standards for one unit of product.  During May, Jackson purchased 125, 000 pounds of direct material at a total cost of $475, 000.The total factory wages for May were $364, 000, 90 percent of which were for direct labor.Jackson manufactured 22, 000 units of product during May using 108, 000 pounds of direct material and 28, 000 direct labor-hours. The labor rate variance for May is:

Quizplus · Accepted Answer

AH × AR = 0.9 × $364, 000 = $327, 600
Labor rate variance = (AH × AR)- (AH × SR)
= ($327, 600)- (28, 000 hours × $12.00 per hour)
= $327, 600 - $336, 000
= $8, 400 F

Jackson Industries Uses a Standard Cost System in Which Direct