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Question - Bowie Sporting Goods manufactures sleeping bags. The manufacturing standards per sleeping bag, based on 5,000 sleeping bags per month, are as follows:
Direct material of 5.50 yards at $5.60 per yard
Direct labor of 3.00 hours at $17.00 per hour
Overhead applied per sleeping bag at $16.00
In the month of April, the company actually produced 5,200 sleeping bags using 27,300 yards of material at a cost of $6.10 per yard. The labor used was 11,700 hours at an average rate of $20.50 per hour. The actual overhead spending was $96,200.
Determine the labor rate variance and round to the nearest whole dollar.
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