Given the following information in standard costing: Standard18,800 hours at $6.80Actual18,600 hours at $7.00 What is the direct labor rate variance? Multiple Choice $3,720 Favorable $2,770 Unfavorable $2,770 Favorable $3,720 Unfavorable

The objective of the question is to calculate the direct labor rate variance using the given…

Answered: Given the following information in…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

Given the following information in standard costing:

Standard	18,800 hours at $6.80
Actual	18,600 hours at $7.00

What is the direct labor rate variance?

Multiple Choice

$3,720 Favorable
$2,770 Unfavorable
$2,770 Favorable
$3,720 Unfavorable

Definition Definition System of assigning an estimated cost to the product (instead of the actual cost) so that the product cost can be determined well in advance and the pricing of the product can be done on time. Since the actual cost cannot be predicted at the initial stage of the production process, the estimated cost is recorded in the books. Any deviation of the estimated cost of the actual cost is adjusted in the books at the end of the period.

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