The production of Saunders Company during July involved actual direct labor costs of $47,918 for 3,800 direct labor hours. The budget for the July level of production called for 3,900 direct labor hours at $12.60 per hour, using a standard cost system.
The company’s labor rate variance for July is:
Multiple Choice
$1,260 Favorable.
$38 Unfavorable.
$1,222 Unfavorable.
$1,222 Favorable.