The Standard Direct Labor Cost for Producing One Unit of Product

question 198

Multiple Choice

The standard direct labor cost for producing one unit of product is 5 direct labor hours at a standard rate of pay of $20. Last month 15000 units were produced and 73500 direct labor hours were actually worked at a total cost of $1350000. The direct labor quantity variance was

• A) $30000 unfavorable.
• B) $45000 unfavorable.
• C) $45000 favorable.
• D) $30000 favorable.

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Definitions:

Cost-Plus Pricing

A pricing strategy where a fixed percentage is added to the production cost to determine the selling price of a product or service.

Markup Percentage

A markup percentage is the amount added to the cost price of goods to cover overhead and profit.

Break Even

Break-even is the point at which total cost and total revenue are equal, meaning there is no net loss or gain, and it's a critical measure of financial feasibility for businesses.

Contact Efficiency

The effectiveness of a business's or marketer's interactions with potential and existing customers, focusing on optimizing time and resources to achieve desired outcomes.