Biery Corporation Makes a Product with the Following Standard Costs

question 153

Multiple Choice

Biery Corporation makes a product with the following standard costs: The company produced 4, 100 units in April using 5, 380 liters of direct material and 2, 610 direct labor-hours.During the month, the company purchased 6, 000 liters of the direct material at $5.80 per liter.The actual direct labor rate was $19.80 per hour and the actual variable overhead rate was $2.90 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 April is:

• A)$1, 968 F
• B)$2, 088 F
• C)$2, 088 U
• D)$1, 968 U

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Definitions:

Job Cost

A method used in accounting to track the costs associated with a specific job or order, capturing materials, labor, and overhead expenses.

Predetermined Overhead Rate

A rate calculated before the accounting period begins, used to apply manufacturing overhead to products or job orders.

Direct Labor-hours

The total hours worked by employees who are directly involved in the manufacturing or production process of goods.

Predetermined Overhead Rate

A rate used to allocate manufacturing overhead costs to products, calculated based on estimated costs and activity levels.