Forfar Engineering performs cement core tests in its laboratory. The following standards have been set for each core test performed: Standard Hours or Quantity Standard Price or Rate Direct materials 3.0 pounds £0.75 per pound Direct labour 0.4 hours £12.00 per hour Variable manufacturing overhead 0.4 hours £9.00 per hour During March, the laboratory performed 2,000 core tests. On March 1 no direct materials (sand) were on hand. Variable manufacturing overhead is assigned to core tests on the basis of direct labour hours. The following events occurred during March: • 8,600 pounds of sand were purchased at a cost of £7,310. • 7,200 pounds of sand were used for core tests. • 840 actual direct labour hours were worked at a cost of £8,610. • Actual variable manufacturing overhead incurred was £3,200. The labour rate variance for March is: A £4,578 unfavourable B £1,470 unfavourable C £4,578 favourable D £1,470 favourable
Forfar Engineering performs cement core tests in its laboratory. The following standards have been set for each core test performed: Standard Hours or Quantity Standard Price or Rate Direct materials 3.0 pounds £0.75 per pound Direct labour 0.4 hours £12.00 per hour Variable manufacturing
During March, the laboratory performed 2,000 core tests. On March 1 no direct materials (sand) were on hand. Variable manufacturing overhead is assigned to core tests on the basis of direct labour hours. The following events occurred during March: • 8,600 pounds of sand were purchased at a cost of £7,310. • 7,200 pounds of sand were used for core tests. • 840 actual direct labour hours were worked at a cost of £8,610. • Actual variable manufacturing overhead incurred was £3,200. The labour rate variance for March is: A £4,578 unfavourable B £1,470 unfavourable C £4,578 favourable D £1,470 favourable
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