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

question 8

Multiple Choice

The following information describes a company's usage of direct labor in a recent period. The total direct labor cost 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) $6,500 unfavorable.
• B) $22,500 favorable.
• C) $6,500 favorable.
• D) $29,000 favorable.
• E) $22,500 unfavorable.

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Definitions:

Quantitative Variable

A variable that can be measured numerically and can vary in quantity, often used in statistical analysis to represent data points.

Histogram

Graphic representation of a frequency distribution using bars to represent each score or group of scores.

Interval Scale

A scale of measurement that shows the order of values and the exact differences between them, but without a true zero point.

Ordinal Scale

A scale of measurement where data is ordered, but the differences between data points cannot be assumed to be equal.