Serenity Equestrian Corporation
Serenity Equestrian Corporation Produces High-Quality Leather Saddles

Multiple Choice

Serenity Equestrian Corporation
Serenity Equestrian Corporation produces high-quality leather saddles. The company has a standard cost system and has set the following standards for materials and labour: $$\begin{array} { l l } \text { Leather } ( 20 \text { strips } ( Q , \$ 15 \text { per strip) } & \$ 300 \\\text { Direct labour } ( 15 \text { hours } ( a ) \$ 15 \text { per hour } ) & \$ 225 \\\text { Total prime cost } & \$ 525\end{array}$$ During the year, the company produced 150 saddles. Actual leather purchased was 3,100 strips at $12 per strip. There were no beginning or ending inventories of leather.Actual direct labour was 2,500 hours at $16 per hour.
-Refer to Serenity Equestrian Corporation. What is the labour rate variance?

A) $2,250 U
B) $2,250 F
C) $2,500 U
D) $2,500 F