Epley Corporation makes a product with the following standard costs:

	Standard Quantity or Hours	Standard Price or Rate
Direct materials	7.0 pounds	$6.5 per pound
Direct labor	0.8 hours	$26.00 per hour
Variable overhead	0.8 hours	$12.00 per hour

In July the company produced 3,370 units using 13,480 pounds of the direct material and 2,816 direct labor-hours. During the month, the company purchased 14,240 pounds of the direct material at a cost of $35,100. The actual direct labor cost was $72,810 and the actual variable overhead cost was $32,380.

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:

$406 F

$406 U

$2,714 U

$2,714 F