Dillon Has a Standard of 2 Hours of Labor Per

question 243

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 price variance is

• A) $770 U.
• B) $800 U.
• C) $1030 F.
• D) $1930 F.

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Definitions:

Variable Manufacturing Overhead

Costs in the manufacturing process that fluctuate with the level of production output, such as utilities or materials.

Machine-Hours

A measure of production time, representing the number of hours machines are operated in the production process.

Variable Manufacturing Overhead

Costs in the manufacturing process that fluctuate with production volume, such as utilities or materials, contrasting with fixed overhead costs.

Plantwide Predetermined

This typically involves a single overhead rate calculated for an entire manufacturing plant, used to allocate overhead costs to products.