Milar Corporation Makes a Product with the Following Standard Costs

question 109

Multiple Choice

Milar Corporation makes a product with the following standard costs: In January the company produced 2,000 units using 16,060 pounds of the direct material and 210 direct labor-hours. During the month, the company purchased 16,900 pounds of the direct material at a cost of $65,910. The actual direct labor cost was $4,473 and the actual variable overhead cost was $756.
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 January is:

• A) $260 U
• B) $273 U
• C) $260 F
• D) $273 F

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Definitions:

Joint Venture

A business agreement between two or more parties to combine resources for a specific project or business activity, sharing risks and rewards.

Tenants in Common

A form of co-ownership where each party owns a specific fraction of the property and can pass their share to heirs.

Accumulated Depreciation

The total amount of depreciation expense that has been recorded for an asset over its useful life.