Use This Information to Answer the Questions That Follow

question 35

Multiple Choice

Use this information to answer the questions that follow.
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The following data relate to direct labor costs for February:
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-What is the direct labor rate variance?

• A) $14,000 favorable
• B) $14,000 unfavorable
• C) $15,400 favorable
• D) $15,400 unfavorable

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Definitions:

Factory Rent

The cost incurred by a business for leasing a manufacturing facility or space where production activities are carried out.

Factory Overhead

All the supplementary costs tied to manufacturing, aside from the expenses of direct materials and direct labor.

Amortization

The periodic transfer of the cost of an intangible asset to expense.

Direct Labor Used

The total hours worked by employees directly involved in the production process, impacting manufacturing costs.