The Standard Rate of Pay Is $20 Per Direct Labor

question 226

Multiple Choice

The standard rate of pay is $20 per direct labor hour. If the actual direct labor payroll was $117600 for 6000 direct labor hours worked the direct labor price (rate) variance is

• A) $2400 unfavorable.
• B) $2400 favorable.
• C) $3000 unfavorable.
• D) $3000 favorable.

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Definitions:

Cash Budget

A financial plan that estimates incoming and outgoing cash flows over a specific period of time to ensure liquidity and solvency.

Minimum Cash Balance

The lowest amount of cash that a business decides to maintain in its accounts to ensure sufficient liquidity for routine operations.

Cash Disbursements

The outflow of cash for various purposes, including operating expenses, asset acquisitions, and debt payments.

Cash Receipts

The sum of all money received by a company during a specified period, from operations, investments, and financing.