Biery Corporation makes a product with the following standard costs: The company produced 4, 100 units in April using 5, 380 liters of direct material and 2, 610 direct labor-hours.During the month, the company purchased 6, 000 liters of the direct material at $5.80 per liter.The actual direct labor rate was $19.80 per hour and the actual variable overhead rate was $2.90 per hour. The company applies variable overhead on the basis of direct labor-hours.The direct materials purchases variance is computed when the materials are purchased.
The labor rate variance for April is:

Question

Biery Corporation makes a product with the following standard costs:  The company produced 4, 100 units in April using 5, 380 liters of direct material and 2, 610 direct labor-hours.During the month, the company purchased 6, 000 liters of the direct material at $5.80 per liter.The actual direct labor rate was $19.80 per hour and the actual variable overhead rate was $2.90 per hour. The company applies variable overhead on the basis of direct labor-hours.The direct materials purchases variance is computed when the materials are purchased.
The labor rate variance for April is:

Quizplus · Accepted Answer

Labor rate variance = AH × (AR - SR)
= 2, 610 hours × ($19.80 per hour - $19.00 per hour)
= 2, 610 hours × ($0.80 per hour)
= $2, 088 U

Biery Corporation Makes a Product with the Following Standard Costs