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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 4.00 yards at $5.40 per yard
Direct labor of 3.00 hours at $19.00 per hour
Overhead applied per sleeping bag at $17.00
In the month of April, the company actually produced 5,200 sleeping bags using 27,300 yards of material at a cost of $5.90 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.
Required - Determine the labor rate variance and round to the nearest whole dollar.
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