Seaside Company produces picture frames. During the year 190,000 picture frames were produced. Materials and labor standards for producing the picture frames are as follows: Direct materials (2 pieces of wood @ $2.25)$4.50Direct labor (2 hours @ $10)$20.00 Seaside purchased and used 400,000 pieces of wood at $2.00 each and its actual labor hours were 360,000 hours at a wage rate of $10.50. Refer to Figure 10-5. What is Seaside's labor rate variance? $180,000 F $180,000 U $225,000 U $217,500 F

Answered: Seaside Company produces picture…

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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Seaside Company produces picture frames. During the year 190,000 picture frames were produced. Materials and labor standards for producing the picture frames are as follows:

Direct materials (2 pieces of wood @ $2.25)	$4.50
Direct labor (2 hours @ $10)	$20.00

Seaside purchased and used 400,000 pieces of wood at $2.00 each and its actual labor hours were 360,000 hours at a wage rate of $10.50.

Refer to Figure 10-5. What is Seaside's labor rate variance?

		$180,000 F
		$180,000 U
		$225,000 U
		$217,500 F

Expert Solution

Step 1

Formula:

Labor rate variance = ( Actual rate - standard rate ) x Actual quantity

Deducting standard rate from actual rate which to be multiplied with actual quantity to derive the labor rate variance.

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