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