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Question - Arrow Industries employs a standard cost system in which direct materials inventory is carried at standard cost. Arrow has established the following standards for the prime costs of one unit of product.
Standard Quantity
Standard Price
Standard Cost
Direct Materials
8 pounds
$1.80 per pound
$14.40
Direct Labor
.25 hour
$8.00 per hour
2.00
$16.40
During November, Arrow purchased 160,000 pounds of direct materials at a total cost of $304,000. The total factory wages for November were $42,000, 90% of which were for direct labor. Arrow manufactured 19,000 units of product during November using 142,500 pounds of direct materials and 5,000 direct labor hours.
Required - What is the direct labor price (rate) variance for November?
A. $1,800
B. $1,900
C. $2,000
D. $2,090
E. $2,200
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