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Question - Milar Corporation makes a product with the following standard costs:
Standard Quantity or Hours
Standard Price or Rate
Direct materials
8.5 pounds
$8.00 per pound
Direct labor
0.8 hours
$29.00 per hour
Variable overhead
$13.50 per hour
In January the company produced 3,400 units using 13,600 pounds of the direct material and 2,840 direct labor-hours. During the month, the company purchased 14,360 pounds of the direct material at a cost of $35,100. The actual direct labor cost was $81,951 and the actual variable overhead cost was $36,748.
The company applies variable overhead on the basis of direct labor-hours. The direct materials purchases variance is computed when the materials are purchased.
Compute the labor rate variance for January?
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