Hardigree Corporation makes a product that has the following direct labor standards:

Standard direct labor-hours 0.3 hours per unit

Standard direct labor rate $ 23.00 per hour

In May the company's budgeted production was 8,900 units, but the actual production was 8,800 units. The company used 2,820 direct labor-hours to produce this output. The actual direct labor cost was $70,218.

The labor rate variance for May is:

(A) $5,016 U

(B) $5,358 U

(C) $5,016 F

(D) $5,358 F

Question

Business

Aileen Rhodes

11 October, 01:14

Hardigree Corporation makes a product that has the following direct labor standards:

Standard direct labor-hours 0.3 hours per unit

Standard direct labor rate $ 23.00 per hour

In May the company's budgeted production was 8,900 units, but the actual production was 8,800 units. The company used 2,820 direct labor-hours to produce this output. The actual direct labor cost was $70,218.

The labor rate variance for May is:

(A) $5,016 U

(B) $5,358 U

(C) $5,016 F

(D) $5,358 F

+5

Answers (1)

Know the Answer?

Micah · Answer 1

The correct answer is B.

Explanation:

Giving the following information:

Hardigree Corporation makes a product that has the following direct labor standards:

Standard direct labor-hours 0.3 hours per unit

Standard direct labor rate $ 23.00 per hour

In May the company's budgeted production was 8,900 units, but the actual production was 8,800 units. The company used 2,820 direct labor-hours to produce this output. The actual direct labor cost was $70,218.

Actual rate = 70,218/2,820 = 24.9

Direct labor price variance = (Standard Rate - Actual Rate) * Actual Quantity

Direct labor price variance = (23 - 24.9) * 2,820 = 5,358 unfavorable