The Tulip Company Makes Mugs for Which the Following Standards

question 85

Multiple Choice

The Tulip Company makes mugs for which the following standards have been developed:
$\begin{array}{lll}&\text { Standard Inputs Expected }&\text { Standard Price }\\\text { Expected }&\text { For Each Unit of Output }&\text { Per Unit of Input }\\\hline\text { Direct Materials } & 5 \text { ounces } & \$ 2 \text { per ounce } \\\text { Direct Labor } & 2.5 \text { hours } & \$ 8 \text { per hour }\end{array}$
Production of 400 mugs was expected in August,but 440 mugs were actually completed.Direct materials purchased and used were 2,100 ounces at an actual price of $2.20 per ounce.Direct labor cost for the month was $5,310,and the actual pay per hour was $9.00.What is the direct labor price variance for August?

• A) $420 Favorable
• B) $420 Unfavorable
• C) $590 Favorable
• D) $590 Unfavorable

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