Reference no: EM132930291

Shade Company adopted a standard cost system several years ago. The standard costs for direct labor and direct materials for its single product are as follows:

Materials (5 kilograms × $12/kilogram) = $60/unit;

direct labor (3.5 hours/unit × $20/hour) = $70/unit.

All materials are issued at the beginning of processing.

The operating data shown below were taken from the records for December:

In-process beginning inventory None In-process ending inventory-80% complete as to labor 980units

Units completed during the period 6,740units

Budgeted output 7,260units

Purchases of materials (in kilograms) 41,000

Total actual direct labor cost incurred$531,864

Direct labor hours worked (AQ) 26,700hours

Materials purchase-price variance$2,460favorable

Increase in materials inventory in December 2,050kilograms

Problem 1: The direct labor rate variance for December, to the nearest dollar, was:

Multiple Choice

Option 1: $59,956 unfavorable.
Option 2: $8,336 unfavorable.
Option 3: $2,136 favorable.
Option 4: $24,956 unfavorable.
Option 5: $6,196 favorable.