Reference no: EM132632135

Hurren Corporation makes a product with the following standard costs:

                                              Standard Quantity or Hours                 Standard Price or Rate                      Standard Cost Per Unit
Direct materials                      8.10 grams                                        $4.00 per gram                              $32.40
Direct labor                           0.2 hours                                           $19.00 per hour                              $3.80
Variable overhead                   0.2 hours                                            $9.00 per hour                              $1.80

The company reported the following results concerning this product in June.

Originally budgeted output 6,300 units
Actual output 6,400 units
Raw materials used in production 39,700 grams
Purchases of raw materials 45,100 grams
Actual direct labor-hours 540 hours
Actual cost of raw materials purchases $260,940
Actual direct labor cost $7,928
Actual variable overhead cost $2,884

The company applies variable overhead on the basis of direct labor-hours. The direct materials purchases variance is computed when the materials are purchased.

Problem 1: The labor rate variance for June is:

Option 1: $2,351 F

Option 2: $2,332 F

Option 3: $2,351 U

Option 4: $2,332 U