The Geurtz Company Uses Standard Costing

question 7

Multiple Choice

The Geurtz Company uses standard costing. The company makes and sells a single product called a Roff. The following data are for the month of August:
Actual cost of direct material purchased and used: £65,560
Material price variance: £5,960 unfavourable
Total materials variance: £22,360 unfavourable
Standard cost per pound of material: £4
Standard cost per direct labour hour: £5
Actual direct labour hours: 6,500 hours
Labour efficiency variance: £3,500 favourable
Standard number of direct labour hours per unit of Roff: 2 hours
Total labour variance: £400 unfavourable
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The labour rate variance was

• A)£3,900 favourable.
• B)£3,900 unfavourable.
• C)£3,100 unfavourable.
• D)£3,100 favourable.

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