Question
Doogan Corporation makes a product with the following standard costs: Standard Quantity or Hours Standard Price or Rate Direct materials 7.4 grams $ 2.00 per
Doogan Corporation makes a product with the following standard costs:
Standard Quantity or Hours | Standard Price or Rate | |||
---|---|---|---|---|
Direct materials | 7.4 | grams | $ 2.00 | per gram |
Direct labor | 0.5 | hours | $ 20.00 | per hour |
Variable overhead | 0.5 | hours | $ 7.00 | per hour |
The company produced 5,200 units in January using 39,310 grams of direct material and 2,380 direct labor-hours. During the month, the company purchased 44,400 grams of the direct material at $1.70 per gram. The actual direct labor rate was $19.30 per hour and the actual variable overhead rate was $6.80 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 January is:
Doogan Corporation makes a product with the following standard costs: Direct materials Direct labor Variable overhead Standard Quantity or Hours 7.4 grams 0.5 hours 0.5 hours Standard Price or Rate $ 2.00 per gram $ 20.00 per hour $ 7.00 per hour The company produced 5,200 units in January using 39,310 grams of direct material and 2,380 direct labor-hours. During the month, the company purchased 44,400 grams of the direct material at $1.70 per gram. The actual direct labor rate was $19.30 per hour and the actual variable overhead rate was $6.80 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 January is: The labor rate variance for January is: Multiple Choice $1,820 U $1,820 F $1,666 U $1,666 FStep by Step Solution
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