Your Corporation makes a product with the following standard costs:

INPUTS

STANDARD QUANTITY OR HOURS

STANDARD PRICE OR RATE

Direct Materials

5.3 kilos

$ 6.00 per kilo

Direct labor

0.5 hours

$10.00 per hour

Variable Overhead

0.5 hours

$ 4.00 per hour

The company reported the following results concerning this product in August:

Actual output

2,100 units

Raw materials used in production

10,850 kilos

Purchases of raw materials

11,800 kilos

Actual direct labor-hours

1,100 hours

Actual cost of raw materials purchases

$ 73,160

Actual direct labor cost

$ 10,560

Actual variable overhead cost

$ 4,510

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 August is: