Use the Following Data to Find the Total Direct Labor

question 108

Multiple Choice

Use the following data to find the total direct labor cost variance if the company produced 3,500 units during the period. Direct labor standard (4 hrs. @ $7/hr.) $ 28 per unit Actual hours worked 12,250
Actual rate per hour $ 7.50

• A) $12,250 favorable.
• B) $7,000 unfavorable.
• C) $6,125 favorable.
• D) $7,000 favorable.
• E) $6,125 unfavorable.

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Definitions:

Product Costs

Product costs are the costs directly attributed to the creation of a product, including materials, labor, and overhead.

Direct Materials

Raw materials that can be directly identified with the production of specific goods or services.

Merchandising Companies

Enterprises engaged in the business of buying merchandise from manufacturers and selling it to customers, typically involving retail or wholesale operations.

Manufacturing Companies

Businesses that produce goods from raw materials through the use of manual labor or machinery, often involving assembly processes.