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Kibodeaux Corporation makes a product with the following standard costs: |
| Standard Quality or Hours | Standard Price or Rate | Standard Cost Per Unit | |
| Inputs | |||
| Direct materials | 9.8 liters | $6.50 per liter | $63.70 |
| Direct labor | 0.1 hours | $23.50 per hour | $2.35 |
| Variable overhead | 0.1 hours | $4.50 per hour | $0.45 |
The company budgeted for production of 3,300 units in June, but actual production was 3,550 units. The company used 34,435 liters of direct material and 337 direct labor hours to produce this output. The company purchased 35,640 liters of the direct material at $4.80 per liter. The actual direct labor rate was $24.20 per hour and the actual variable overhead rate was $4.20 per hour.
The company applies variable overhead on the basis of direct labor hours. The direct materials purchases variance is computed when the materials are purchased.
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The labor rate variance for June is?
Please explain. thank you 🙂 |