Subject: Business / Accounting
ABC Company began operations on June 1, 2019. For its first month of operations, ABC
Company established the following standards for unit of its single product:
standard quantity standard price
direct materials 8 pounds $3.50 per pound
direct labor 7 hours $15.00 per hour
variable overhead 7 hours $7.50 per hour
The following information is available for surge for the month of June:
1. 65,000 pounds of direct materials were purchased at a total cost of $188,500.
2. 45,000 direct labor hours were worked at a total cost of $731,250.
3. The variable overhead cost for the month totaled $325,000.
4. 6,500 units were produced.
5. At June 30, ABC Company had 8,000 pounds of direct materials on hand.
Calculate the direct labor rate variance for June. If the variance is favorable, enter
an F after your number with a space between the number and the F (i.e., 10,000 F). If
the variance is unfavorable, enter a U after your number with a space between the
number and the U (i.e., 10,000 U).
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