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

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Answer #1

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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