Data on Gantry Company's Direct Labor Costs Are Given Below

question 123

Multiple Choice

Data on Gantry Company's direct labor costs are given below:
$\begin{array}{lrr} \text { Standard direct-labor hours } &30,000\\ \text {Actual direct-labor hour's } &29,000\\ \text { Direct-labor efficiency variance-favorable } &\$4,000\\ \text { Direct-labor rate variance-favorable } &\$5,800\\ \text { Total direct labor payroll } &\$110,200\\\end{array}$

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What was Gantry's standard direct labor rate?

• A) $3.54
• B) $3.80
• C) $4.00
• D) $5.80

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Definitions:

Unfavorable Activity Variance

A discrepancy where the actual cost exceeds the budgeted or planned cost in managerial accounting, often analyzed in the context of activity-based costing.

Flexible Budget Performance Report

A report that compares the actual performance and expenditures of a business against a budget that adjusts with the level of activity, helping to provide a more accurate basis for comparison and analysis.

Supplies Cost

The expense incurred to purchase supplies needed for the operation of a business.

Cost Formula

An equation used to determine the total cost of production or service delivery, factoring in fixed and variable costs.