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Managerial Accounting

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Moderate

Labor Rate Variance for Grills

MGRACT-Z1GBQL

Rice Corp manufactures gas grills for sale to retailers. The standard number of hours required to build a shipment of gas grills is 2,500 hours. The standard wage rate is \$21.50 per hour. The actual hours incurred were 2,610. Actual labor wages incurred \$56,767.50.

What is the labor rate variance?

A

$652.50 Unfavorable

B

$3,017.50 Unfavorable

C

$2,365 Unfavorable

D

$652.50 Favorable