Oddo Corporation makes a product with the following standard costs: The company reported the following results concerning this product in December. 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 December is:

Question

Oddo Corporation makes a product with the following standard costs:  The company reported the following results concerning this product in December.  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 December is:

Quizplus · Accepted Answer

Labor rate variance = AH × (AR - SR)
= 3, 160 hours × ($18.30 per hour - $20.00 per hour)
= 3, 160 hours × (-$1.70 per hour)
= $5, 372 F

Oddo Corporation Makes a Product with the Following Standard Costs