The following labor standards have been established for a particular product:

The following labor standards have been established for a particular product:

Standard labor-hours per unit of output		7.6	hours
Standard labor rate	$	15.30	per hour

The following data pertain to operations concerning the product for the last month:

Actual hours worked		9,700	hours
Actual total labor cost	$	145,500
Actual output		1,000	units

What is the labor rate variance for the month?

Multiple Choice

• $2,910 F

  Correct
• $300 F
• $2,910 U
• $300 U

Explanation

AH × AR = $145,500

Labor rate variance = (AH × AR) − (AH × SR)

= ($145,500) − (9,700 hours × $15.30 per hour)

= $145,500 − $148,410

= $2,910 F