Reference no: EM132081121

Question - Milton Company uses a standard cost system.

Standards call for 2 direct labor hours per widget. The standard labor rate is $10 per hour.

Four pounds of material are needed for each widget at a standard cost of $2.25 per pound.

Milton actually produces 17,000 widgets during the year.

Direct labor costs are $359,100 for 34,200 hours.

Milton purchases 70,000 pounds of materials at $2.50 per pound, and used 65,400 pounds of those materials (the rest are in inventory at the end of the year)

For direct labor, what is the rate (price) variance? Answers are labeled as favorable (F) or unfavorable (U).

A) $17,000 F

B) $8,5000 U,

C) $34,200 U,

D) $17, 100 U,

E) $19,000 U