Reference no: EM132930295

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 800units

Units completed during the month 7,000units

Budgeted output 8,400units

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

Total actual labor costs incurred$522,000

Direct labor hours worked (AQ) 36,000hours

Materials purchase-price variance$3,500unfavorable

Increase in materials inventory in July 1,200kilograms

Beginning inventory of materials 0kg.

Problem 1: The direct labor rate variance for July (to nearest dollar) is: (Round your intermediate calculations to 2 decimal places.)

Multiple Choice

Option 1: $13,600 favorable.
Option 2: $3,600 favorable.
Option 3: $54,600 unfavorable.
Option 4: $18,000 unfavorable.
Option 5: $55,200 unfavorable.