Pippin Inc

question 183

Multiple Choice

Pippin Inc. has provided the following data concerning one of the products in its standard cost system. Variable manufacturing overhead is applied to products on the basis of direct labor-hours.
The company has reported the following actual results for the product for June:

-The labor rate variance for the month is closest to:

• A) $1,020 F
• B) $1,020 U
• C) $920 F
• D) $920 U

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Definitions:

Labor Efficiency Variance

The difference between the actual labor hours used and the standard labor hours expected for the level of production achieved.

Labor Rate Variance

A financial measure that calculates the difference between the actual labor costs and the expected labor costs based on standard rates.

Labor Rate Variance

The difference between the actual cost of labor and the budgeted cost, based on the standard labor rate.

Labor Rate Variance

The difference between the actual hourly wage rate paid to workers and the expected or standard rate, affecting production costs.