The Fellowes Company has developed standards for direct labor. During June, 80 units were scheduled and 105 were produced. Data related to direct labor are:Standard hours allowedStandard wages allowedActual direct labor2 hours per unit$ 5.00 per hour240 hours (total cost $1,176)What is the direct labor rate variance for June?Multiple Choice$24 unfavorable$21 favorable$24 favorable$21 unfavorable ### Direct Labor Standards and Variance AnalysisThe Fellowes Company has developed standards for direct labor. During June, 80 units were scheduled, and 105 units were produced. Data related to direct labor are as follows:- **Standard hours allowed**: 2 hours per unit- **Standard wages allowed**: $5.00 per hour- **Actual direct labor**: 240 hours (total cost $1,176)#### Question:What is the direct labor rate variance for June?#### Multiple Choice Options:- $24 unfavorable- $21 favorable- $24 favorable (selected)- $21 unfavorable#### Explanation:To calculate the direct labor rate variance, use the formula:\[ \text{Labor Rate Variance} = (\text{Actual Rate} - \text{Standard Rate}) \times \text{Actual Hours Worked} \]Calculate the actual hourly rate:\[ \text{Actual Rate} = \frac{\text{Total Cost}}{\text{Actual Hours}} = \frac{1176}{240} = 4.90 \]Then, calculate the variance:\[ \text{Variance} = (4.90 - 5.00) \times 240 = -0.10 \times 240 = -24 \]Thus, the variance is $24 favorable, meaning the actual labor cost per hour was lower than the standard cost.

Name: The Fellowes Company has developed standards for direct labor. During
Uploaded: 2024-03-20T06:33:06.000Z
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Description: The Fellowes Company has developed standards for direct labor. During June, 80 units were scheduled and 105 were produced. Data related to direct labor are:Standard hours allowedStandard wages allowedActual direct labor2 hours per unit$ 5.00 per hour