The Standard Number of Direct Labor Hours Used in Calculating

question 46

Multiple Choice

The standard number of direct labor hours used in calculating the direct labor efficiency variance is based on

• A)the static budget.
• B)the actual number of finished units produced.
• C)the number of units in the production budget.
• D)the number of units sold.

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Definitions:

Direct Labor

The wages and related expenses for workers directly involved in the production of goods or the delivery of services.

Finished Goods Inventory

Inventory that has completed the manufacturing process and is ready to be sold to customers.

Cost of Goods Manufactured

The total cost incurred by a company to produce goods during a specific period, including materials, labor, and overhead.

Cost of Goods Sold

An expense representing the cost of purchasing raw materials and manufacturing the goods that a company sells during a specific period.