The Following Data Relate to Direct Labor Costs for the Current

question 33

Multiple Choice

The following data relate to direct labor costs for the current period:Standard costs9,000 hours at $5.50Actual costs8,500 hours at $5.75What is the direct labor rate variance?

• A) $2,250 unfavorable
• B) $2,125 unfavorable
• C) $2,250 favorable
• D) $2,125 favorable

---

Definitions:

Discount Factor

A multiplier used to determine the present value of future cash flows or income, reflecting the time value of money.

Internal Rate

Often referred to as the internal rate of return (IRR), it is the discount rate that makes the net present value (NPV) of all cash flows from a particular project equal to zero.

Payback Period

The time duration required for an investment to generate cash flows sufficient to recover the initial cost of the investment.

Net Present Value

The difference between the present value of cash inflows and the present value of cash outflows over a period, used in capital budgeting to assess the profitability of an investment.