The Actual Cost of Direct Labor Per Hour Is $12

question 107

Multiple Choice

The actual cost of direct labor per hour is $12.50 and the standard cost of direct labor per hour is $12.00. Two budgeted direct labor hours are allowed per finished good. During the current period, 250 finished goods were produced using 475 direct labor hours. How much is the direct labor price variance?

• A) $250.00 favorable
• B) $250.00 unfavorable
• C) $237.50 favorable
• D) $237.50 unfavorable

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Definitions:

Need for Competence

An individual's intrinsic desire to be effective in dealing with the environment and to master complex tasks.

Intrinsic Motivation

A drive to perform an activity for its inherent satisfaction rather than for some separable outcome or external reward.

Need for Capability

The requirement for a person or organization to have the skills, resources, or abilities necessary to accomplish a task or realize a goal.

Intrinsic Motivation

The drive to perform an activity for its inherent satisfaction and pleasure, rather than for some separable consequence or reward.