The Geurtz Company Uses Standard Costing

Multiple Choice

The Geurtz Company uses standard costing. The company makes and sells a single product called a Roff. The following data are for the month of August:

• Actual cost of direct material purchased and used: $65,560
• Material price variance: $5,960 unfavorable
• Total materials variance: $22,360 unfavorable
• Standard cost per pound of material: $4
• Standard cost per direct labor-hour: $5
• Actual direct labor-hours: 6,500 hours
• Labor efficiency variance: $3,500 favorable
• Standard number of direct labor-hours per unit of Roff: 2 hours
• Total labor variance: $400 unfavorable

-The labor rate variance was:

A) $3,900 favorable
B) $3,900 unfavorable
C) $3,100 unfavorable
D) $3,100 favorable