Atlas Machinery Co. manufactures heavy-duty motors. Each motor requires a standard cost of $75 for a specific component, and each motor requires two components. In August, the company purchased 150 components for $11,250. The company used 120 components in the production of 55 motors, with five components damaged during the installation process. The standard quantity of labor is 18 hours per motor, with a standard wage rate of $24 per hour. In August, the company incurred 1,050 labor hours at a total cost of $25,200. How much is the labor rate variance?

Atlas Machinery Co. manufactures heavy-duty motors. Each motor requires a standard cost of $75 for a specific component, and each motor requires two components. In August, the company purchased 150 components for $11,250. The company used 120 components in the production of 55 motors, with five components damaged during the installation process. The standard quantity of labor is 18 hours per motor, with a standard wage rate of $24 per hour. In August, the company incurred 1,050 labor hours at a total cost of $25,200. How much is the labor rate variance?

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter6: Activity-based, Variable, And Absorption Costing

Section: Chapter Questions

Problem 6PA: Box Springs, Inc., makes two sizes of box springs: twin and double. The direct material for the twin...

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