Reference no: EM133006742

Question - Machine Builders Inc. adopted a standard cost system several years ago that it uses in conjunction with its process cost system. The per-unit standard costs for direct materials and direct labor for its single product are as follows: Materials: (5 kilograms × $10 per kilogram) $50 Labor: (6 hours × $14 per hour) $84.

All materials are issued at the beginning of processing. The operating data shown below were taken from the records for July:

In-process beginning inventory none In-process ending inventory-90% complete as to labor 800 units

Units completed during the month 7,000 units

Budgeted output 8,400 units

Purchases of materials, in kilograms (AQ) 29,000

Total actual labor costs incurred $522,000

Direct labor hours worked (AQ) 36,000 hours

Materials purchase-price variance $3,500 unfavorable

Increase in materials inventory in July 1,200 kilograms

Beginning inventory of materials 0 kg.

What the direct labor rate variance for July?