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Question - Epley Corporation makes a product with the following standard costs:
Standard Quantity or HoursStandard Price or Rate Direct materials9.5 pounds$9.0 per pound Direct labor0.8 hours$31.00 per hour Variable overhead0.8 hours$14.50 per hour
In July the company produced 3,420 units using 13,680 pounds of the direct material and 2,856 direct labor-hours. During the month, the company purchased 14,440 pounds of the direct material at a cost of $35,100. The actual direct labor cost was $88,125 and the actual variable overhead cost was $39,700.
The company applies variable overhead on the basis of direct labor-hours. The direct materials purchases variance is computed when the materials are purchased.
Calculate the labor rate variance for July.
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