Commercial Solutions Company manufactures a cleaning solvent. The company employs both skilled and unskilled workers. To produce one 55-gallon drum of solvent requires Materials A and B as well as skilled labor and unskilled labor. The standard and actual material and labor information is presented below:

Standard:

Material A: 30.25 gallons @ $1.25 per gallon Material B: 24.75 gallons @ $2.00 per gallon

Skilled Labor: 4 hours @ $12 per hour Unskilled Labor: 2 hours @ $ 7 per hour

Actual:

Material A: 10,716 gallons purchased and used @ $1.50 per gallon Material B: 17,484 gallons purchased and used @ $1.90 per gallon

Skilled labor hours: 1,950 @ $11.90 per hour Unskilled labor hours: 1,300 @ $7.15 per hour During the current month Commercial Solutions Company manufactured 500 55-gallon drums.

Round all answers to the nearest whole dollar.

Refer to Commercial Solutions Company. What is the labor rate variance?

Select one:

a. $2,583 U

b. $0

c. $1,083 U

d. $1,083 F