Dillon Has a Standard of 2 Hours of Labor Per

question 51

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 quantity variance is

• A) $770 U.
• B) $770 F.
• C) $1800 F.
• D) $1930 F.

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Definitions:

Variable Production Costs

Costs that vary directly with the level of production output, such as raw materials and labor expenses.

Fixed Production Costs

Payments that stay unchanged regardless of how much is produced or sold, covering rent, salaries, and insurance.

Net Income

The total profit of a company after all expenses, taxes, and costs have been subtracted from total revenues.

Absorption Costing

A costing approach that encompasses all expenses related to production, including direct materials, direct labor, and all manufacturing overheads, both variable and fixed, as part of a product's cost.