Question

17 - Use this information for Harry Company to answer the question that follow. The following...

17 - Use this information for Harry Company to answer the question that follow. The following data are given for Harry Company:

 Budgeted production 1,069 units Actual production 909 units Materials: Standard price per ounce \$1.85 Standard ounces per completed unit 12 Actual ounces purchased and used in production 11,235 Actual price paid for materials \$23,032 Labor: Standard hourly labor rate \$14.44 per hour Standard hours allowed per completed unit 4.2 Actual labor hours worked 4,681 Actual total labor costs \$76,066 Overhead: Actual and budgeted fixed overhead \$1,032,000 Standard variable overhead rate \$27.00 per standard labor hour Actual variable overhead costs \$131,068

Overhead is applied on standard labor hours. (Round interim calculations to the nearest cent.)

The direct labor rate variance is

a.\$8,472.61 favorable

b.\$20,936.97 unfavorable

c.\$8,472.61 unfavorable

d.\$20,936.97 favorable

Option . C \$ 8,472.61 unfavorable is correct answer

Direct labour rate variance

Actual labour hours worked( standard rate per hour - actual rate per hour)

Actual rate per hour = actual total labour ÷ Actual hours worked

So by putting value we can find actual rate per hour

\$76066 ÷ 4681= 16.2499\$ or rounded to nearest cent is \$ \$16.25

Actual hours worked= 4681

Standard labour rate per hour= \$14.44

Actual labour rate per hour = \$ 16.25

Labour rate variance

4681(\$14.44 -\$16.25)= (\$8472.61) or we can say

\$8472.61 unfavorable

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