Question

# Gilder Corporation makes a product with the following standard costs: Standard Quantity or Hours Standard Price...

Gilder Corporation makes a product with the following standard costs: Standard Quantity or Hours Standard Price or Rate Standard Cost Per Unit Direct materials 7.00 grams \$14.00 per gram \$98.00 Direct labor 0.20 hours \$20.00 per hour \$ 4.00 Variable overhead 0.20 hours \$ 7.00 per hour \$ 1.40 The company reported the following results concerning this product in June: Originally budgeted output 4,000 units Actual output 4,080 units Raw materials used in production 25,996 grams Purchases of raw materials 29,496 grams Actual direct labor-hours 710 hours Actual cost of raw materials purchases \$398,200 Actual direct labor cost \$13,625 Actual variable overhead cost \$3,676 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 June is: \$603 F \$603 U \$575 F \$575 U

#### Homework Answers

Answer #1

Answer:- The labor rate variance for June is \$575 F.

Explanation:-

Labor Rate variance = (Standard rate – Actual rate) * Actual hours

= (\$20.00 per hour. – \$19.19 per hour hours)*710 hours

=\$575 Favourable

Actual rate per hour =Actual labor costs/Actual direct labor hours

=\$13625/710 hours =\$19.19 per hour

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