Doogan Corporation Makes a Product with the Following Standard Costs

question 338

Multiple Choice

Doogan Corporation makes a product with the following standard costs: The company produced 5,200 units in January using 39,310 grams of direct material and 2,380 direct labor-hours. During the month, the company purchased 44,400 grams of the direct material at $1.70 per gram. The actual direct labor rate was $19.30 per hour and the actual variable overhead rate was $6.80 per hour.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) $1,666 Favorable
• B) $1,820 Favorable
• C) $1,666 Unfavorable
• D) $1,820 Unfavorable