The Following Data Relate to Direct Labor Costs for the Current

question 164

Multiple Choice

The following data relate to direct labor costs for the current period of Executive Inc.: $$\begin{array} { l l } \text { Standard costs } & 6,000 \text { hours at } \$ 12.00 \\\text { Actual costs } & 7,500 \text { hours at } \$ 11.60\end{array}$$ ? What is the direct labor rate variance?

• A) $3,000 unfavorable
• B) $3,000 favorable
• C) $2,400 unfavorable
• D) $2,400 favorable

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Definitions:

Lag Indicators

Metrics that reflect the results of activities, showing the outcome of past actions and performance.

Return On Investment

A financial ratio that calculates the gain or loss generated from an investment relative to the amount of money invested.

Nonfinancial Measures

Performance indicators not expressed in monetary terms, used in management and performance evaluation, such as customer satisfaction or employee turnover rates.

Financial Performance

A measure of a company's profitability, liquidity, solvency, and efficiency, often assessed through financial statements and ratios.