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Preble Company manufactures one product. Its variable manufacturing overhead is applied to production based on...

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Accounting

Preble Company manufactures one product. Its variable manufacturing overhead is applied to production based on direct labor-hours and its standard cost card per unit is as follows:

Direct materials: 5 pounds at $8.00 per pound $ 40.00
Direct labor: 2 hours at $14 per hour 28.00
Variable overhead: 2 hours at $5 per hour 10.00
Total standard cost per unit $ 78.00

The planning budget for March was based on producing and selling 25,000 units. However, during March the company actually produced and sold 30,000 units and incurred the following costs:

a.

Purchased 160,000 pounds of raw materials at a cost of $7.50 per pound. All of this material was used in production.
b.

Direct laborers worked 55,000 hours at a rate of $15.00 per hour.
c. Total variable manufacturing overhead for the month was $280,500.

9.

What is the labor rate variance for March? (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance.).)

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