Gentile Corporation Makes a Product with the Following Standard Costs

Multiple Choice

Gentile Corporation makes a product with the following standard costs: The company produced 6,000 units in May using 36,970 kilos of direct material and 4,340 direct labor-hours. During the month, the company purchased 40,400 kilos of the direct material at $4.70 per kilo. The actual direct labor rate was $13.70 per hour and the actual variable overhead rate was $2.70 per hour.

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

-The labor rate variance for May is:

A) $1,302 U
B) $1,440 U
C) $1,440 F
D) $1,302 F