Reference no: EM132516842

A company uses the following standard costs to produce a single unit of output.

Direct materials 8 pounds at $0.60 per pound=$4.80

Direct labor 0.60 hour at $10.00 per hour=$6.00

Manufacturing overhead 0.60 hour at $3.30 per hour=$1.98

During the latest month, the company purchased and used 77,000 pounds of direct materials at a price of $0.9 per pound to produce 10,000 units of output. Direct labor costs for the month totaled $56,454 based on 5,820 direct labor hours worked. Variable manufacturing overhead costs incurred totaled $16,800 and fixed manufacturing overhead incurred was $20,000.

Question 1: Based on this information, the direct labor rate variance for the month was:

Multiple Choice

Option 1: $1,800 favorable

Option 2: $3,546 favorable

Option 3: $1,746 favorable

Option 4: $3,546 unfavorable

Option 5: $1,800 unfavorable