Asked by Barbara Little on Jul 17, 2024
Verified
The labour rate variance is:
A) $480 F.
B) $480 U.
C) $440 F.
D) $440 U.
Variable Manufacturing Overhead
The portion of variable overhead that is directly associated with the manufacturing process, such as indirect materials or supplies.
Direct Material
Raw materials that are directly traceable and allocable to a finished product.
- Measure and review variances in labor, particularly focusing on rate and efficiency differences.
- Understand and apply variable and fixed overhead variance analysis.
Verified Answer
KN
Khanh Nguy?nJul 23, 2024
Final Answer :
D
Explanation :
The labour rate variance is calculated as (Actual Hourly Rate - Standard Hourly Rate) x Actual Hours Worked. The standard hourly rate is $8/hr, and the actual hourly rate can be calculated as $9,240 / 1,100 hrs = $8.40/hr. Thus, the labour rate variance is ($8.40 - $8) x 1,100 = $0.40 x 1,100 = $440 Unfavorable (U), because the actual rate is higher than the standard rate.
Learning Objectives
- Measure and review variances in labor, particularly focusing on rate and efficiency differences.
- Understand and apply variable and fixed overhead variance analysis.
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