Dillon Has a Standard of 2 Hours of Labor Per

question 243

Multiple Choice

Dillon has a standard of 2 hours of labor per unit at $12 per hour. In producing 2000 units Dillon used 3850 hours of labor at a total cost of $46970. Dillon's labor price variance is

• A) $770 U.
• B) $800 U.
• C) $1030 F.
• D) $1930 F.

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Definitions:

Fixed Costs

Costs that do not change with the level of output, such as rent, salaries, and insurance premiums.

Short Run

A time period in which at least one factor of production is fixed, limiting the ability of a firm to adjust its output.

Maximize Profits

The goal of increasing the difference between revenue and expenses to the highest possible level.

Minimize Losses

a strategy or approach aimed at reducing the amount of financial or production losses to the lowest possible level.