Reference no: EM132607917
The Albright Company uses standard costing and has established the following standards for its single product:
Direct Materials 2 litres at $3 per litre
Direct Labour 0.5 hours at $8 per hour
Variable Manufacturing Overhead 0.5 hours at $2 per hour
During November, the company made 4,000 units and incurred the following costs:
Direct Materials Purchased 8,100 litres at $3.10 per litre
Direct Materials Used 7,600 litres
Direct Labour Used 2,200 hours at $8.25 per hour
Actual Variable Manufacturing Overhead $4,175
The company applies variable manufacturing overhead to products on the basis of direct labour hours.
Problem 1: What was the labour rate variance for November?
A) $1,050 unfavourable.
B) $2,150 unfavourable.
C) $2,150 favourable.
D) $550 unfavourable.