A.)

Epley Corporation makes a product with the following standard costs:

	Standard Quantity or Hours	Standard Price or Rate
Direct materials	5.0 pounds	$4.5 per pound
Direct labor	0.8 hours	$22.00 per hour
Variable overhead	0.8 hours	$10.00 per hour

In July the company produced 3,330 units using 13,320 pounds of the direct material and 2,784 direct labor-hours. During the month, the company purchased 14,080 pounds of the direct material at a cost of $35,100. The actual direct labor cost was $60,846 and the actual variable overhead cost was $26,668.

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 July is:

$402 F

$402 U

$2,238 U

$2,238 F

B.)

Midgley Corporation makes a product whose direct labor standards are 0.8 hours per unit and $37 per hour. In April the company produced 7,800 units using 5,740 direct labor-hours. The actual direct labor cost was $120,540.

The labor efficiency variance for April is:

$18,500 U

$18,500 F

$110,340 F

$110,340 U

C.)

The following labor standards have been established for a particular product:

Standard labor-hours per unit of output	8.3	hours
Standard labor rate	$15.65	per hour

The following data pertain to operations concerning the product for the last month:

Actual hours worked	10,400	hours
Actual total labor cost	$160,160
Actual output	1,200	units

What is the labor rate variance for the month?

$2,600 F

$300 U

$2,600 U

$300 F