A Company Uses the Following Standard Costs to Produce a Single

question 124

Multiple Choice

A company uses the following standard costs to produce a single unit of output. During the latest month,the company purchased and used 58,000 pounds of direct materials at a price of $1.00 per pound to produce 10,000 units of output.Direct labor costs for the month totaled $56,350 based on 4,900 direct labor hours worked.Variable manufacturing overhead costs incurred totaled $15,000 and fixed manufacturing overhead incurred was $10,400.Based on this information,the direct labor rate variance for the month was:

• A)$1,200 favorable
• B)$3,650 favorable
• C)$2,450 favorable
• D)$3,650 unfavorable
• E)$1,200 unfavorable

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