Reference no: EM132605956

Milar Corporation makes a product with the following standard costs:

                                                                                Standard Quantity or Hours                       Standard Price or Rate

Direct materials	8.0	pounds	$ 7.50	per pound
Direct labor	0.8	hours	$28.00	per hour
Variable overhead	0.8	hours	$13.00	per hour

in January the company produced 3,390 units using 13,560 pounds of the direct material and 2,832 direct labor-hours. During the month, the company purchased 16,900 pounds of the direct material at a cost of $14,320. The actual direct labor cost was $78,888 and the actual variable overhead cost was $35,284.

The company applies variable overhead on the basis of direct labor-hours. The direct materials purchases variance is computed when the materials are purchased.

Question 1: The labor rate variance for January is:

Multiple Choice

Option 1: $408 F

Option 2: $408 U

Option 3: $2,952 U

Option 4: $2,952 F