The Following Information Describes a Company's Usage of Direct Labor

question 1

Multiple Choice

The following information describes a company's usage of direct labor in a recent period. The direct labor rate variance is: $\begin{array}{llr} \text { Actual hours used } &45,000\\ \text { Actual rate per hour} &\$15.00\\ \text {Standard rate per hour } &\$14.50\\ \text {Standard hours for units produced } &47,000\\\end{array}$

• A) $52,500 favorable.
• B) $22,500 unfavorable.
• C) $29,000 unfavorable.
• D) $29,000 favorable.
• E) $52,500 unfavorable.

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Definitions:

Income Statement

A financial statement that shows a company’s revenue and expenses over a specified period of time, resulting in net profit or loss.

Liability

Financial obligations or debts owed by a business to external parties, which must be settled over time through the transfer of economic benefits including money, goods, or services.

Goods

Tangible products or merchandise that are manufactured, bought, and sold in commerce.

Services

The action of helping or doing work for someone, often producing intangible benefits.