Reference no: EM132637303
XANGHAI Corp. manufactures changeable typeheads for use on portable typewriters. Each typehead is in a set consisting of the lead alloy typehead itself, a cover for the key on the typewriter keyboard, and a plastic box to hold the two items. At the beginning and end of June, there were no materials inventories.
The following standards were developed for each unit:
Item Standard per Unit Materials:
Lead alloy (3 oz. @ P.22) P .66 Cover materials (6 oz. @ P.04) .24
Container boxes (1 @ P.10) .10
Direct labor (1/4 hr. @ P12 per hr.) 3.00
Overhead (P10 per direct labor hour) 2.50
Total cost P 6.50
Annual production is estimated at 50,000 units, with fixed overhead of P25,000. During the past year, the following costs were incurred to produce 40,000 units: Materials: Lead alloy: 122,000 oz. @ P.20 Cover materials: 235,000 oz. @ P.04 Container boxes: 40,500 @ P.09 Direct labor: 9,500 hrs. @ P12.50 Overhead: P90,000
Problem 1: What is the labor rate variance?
a. P4,750 U
b. P6,000 F
c. P4,750 F
d. P6,000 U