Royal Corp. produces drum kits. It takes 4 hours of direct labor to produce a single drum kit. Generals standard labor cost is $12 per hour. During July, Royal produced 18,000 drum kits and used 72,130 hours of direct labor at a total cost of $863,560. What is Royals labor rate variance for August?

Multiple Choice

• $2,000 unfavorable.

• $2,000 favorable.

• $3,996 favorable.

• $1,996 favorable.

• $1,996 unfavorable.