Milar Corporation Makes a Product with the Following Standard Costs

question 430

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 Unfavorable
• B) $273 Unfavorable
• C) $260 Favorable
• D) $273 Favorable

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