Lucky Company's Direct Labor Information for the Month of February

question 47

Multiple Choice

Lucky Company's direct labor information for the month of February is as follows: $\begin{array}{lr}\text { Actual direct labor hours worked (AQ) } & 61,500 \\\text { Standard direct labor hours allowed (SQ) } & 63,000 \\\text { Total payroll for direct labor } & \$ 774,900 \\\text { Direct labor efficiency variance } & \$ 18,000\end{array}$ The direct labor rate variance for February (rounded to the nearest dollar) was:

• A) $36,900 unfavorable.
• B) $37,800 unfavorable.
• C) $55,350 unfavorable.
• D) $56,700 unfavorable.
• E) $73,800 unfavorable.

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Definitions:

Subassemblies

Components or assemblies that are put together to form a part of a larger final product, often manufactured separately before being integrated into the main assembly.

Setup Cost

The expenses incurred to prepare equipment or processes for manufacturing an order or batch of products.

Safety Stock

Additional inventory kept to prevent stockouts caused by fluctuations in demand or supply chain delays.