Q27

Ally Manufacturing uses a standard cost system and its July production of 2,400 units involved actual direct labor costs of $365,000 for 7,300 hours worked (AQ). The budget for July called for production of 2,600 units with 7,800 direct labor hours at $46.00 per hour (SP).

Ally's direct labor rate variance for July was:

Multiple Choice

• $4,600 unfavorable.

• $29,200 unfavorable.

• $33,800 unfavorable.

• $2,600 unfavorable.

• $26,600 favorable.