Claire Company Uses a Standard Costing System - What Is the Total Labour Budget Variance for Claire

question 82

Multiple Choice

Claire Company uses a standard costing system.The following information pertains to direct labour costs for the month of February: $\begin{array}{ll}\text { Standard direct labour rate per hour } & \$ 15.00 \\\text { Actual direct labour rate per hour } & \$ 13.50 \\\text { Labour rate variance } & \$ 18,000 \text { favourable } \\\text { Actual output } & 1,000 \text { units } \\\text { Standard hours allowed for actual production } & 10,000 \text { hours }\end{array}$
- What is the total labour budget variance for Claire Company?

• A)$12,000 (F)
• B)$12,000 (U)
• C)$18,000 (F)
• D)$18,000 (U)

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Definitions:

Operating Losses

Financial losses that occur when a company's operating expenses exceed its revenues during a given period, excluding gains or losses from investments or extraordinary items.

Stock Prices

The cost of purchasing a share of a company through the stock market, which fluctuates based on supply and demand.

Working Capital

The difference between a company's current assets and current liabilities, indicating the liquidity and operational efficiency of the business.

Loan Defaults

Occurs when a borrower fails to meet the legal obligations or conditions of a loan agreement.