Information on Engstrom”s direct labor costs for the month of August is as follows:

Actual rate

$7.50

Standard hours

11,000

Actual hours

10,000

Direct labor price variance—unfavorable

$5,000

What was the standard rate for August?

  1. $6.95.
  2. $7.00.
  3. $8.00.
  4. $8.05.