Accurate Tax Returns Budgets 2 Direct Labor Hours for Every

question 156

Multiple Choice

Accurate Tax Returns budgets 2 direct labor hours for every tax return that it prepares, at a standard cost of $32 an hour. During the most recent year, 500 returns were completed with the labor cost totaling $18,000. The actual labor cost was $36 per hour during that period. The actual number of labor hours was 1,000. What was the direct labor cost variance?

• A)$2,000 F
• B)$32,000 U
• C)$4,000 U
• D)$32,000 F

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Definitions:

FOB Shipping Point

A shipping term indicating that the buyer assumes ownership and responsibility for goods at the seller's location, and thus is responsible for the shipping costs and potential damages.

Ownership

The legal right or title to an asset or property, encompassing the control, use, and disposition of the asset.

Perpetual System

An inventory management system that records sales and purchases of goods instantly through computerized systems to maintain accurate inventory levels at all times.

Revenue Side

Refers to the income-generating aspects of a business, focusing on activities that bring revenue into the company.