The Geurtz Company uses standard costing The company makes a

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:

$8,190 unfavorable

$2,190 favorable

$8,190 favorable

$2,190 unfavorable

•	Actual cost of direct material purchased and used: $82,680
•	Material price variance: $3,180 unfavorable
•	Total materials variance: $21,180 unfavorable
•	Standard cost per pound of material: $5
•	Standard cost per direct labor-hour: $5
•	Actual direct labor-hours: 11,700 hours
•	Labor efficiency variance: $3,000 favorable
•	Standard number of direct labor-hours per unit of Roff: 3 hours
•	Total labor variance: $5,190 unfavorable

Solution:

Total labor variance = $5,190 U

Labor efficiency variance = $3,000 F

Total labor variance = Labor efficiency variance + Labor rate variance

$5,190 U = $3,000 F + Labor rate variance

Labor rate variance = -$5,190 - $3,000 = $8,190 U

Hence first option is correct.