Using the Labor Time Standard of 0 $\quad 4,950$ Hours
Total Cost of Direct Labor

question 106

Multiple Choice

Using the labor time standard of 0.5 labor hour per unit and a labor cost standard of $10 per labor hour for a 10 pound bag of chocolate and the following actual cost and usage data, compute the direct labor variance. Direct labor haurs used $\quad 4,950$ hours
Total cost of direct labor $\quad \$ 53,460$
Number of good urits produced $\quad 9,000$ units

• A) $3,960 (F)
• B) $8,460 (U)
• C) $3,960 (U)
• D) $8,460 (F)

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Definitions:

Predetermined Overhead Rate

A rate calculated before a period begins, based on the estimated total manufacturing overhead costs and estimated allocation base, used to allocate overhead to products or job orders.

Manufacturing Departments

Specialized sections within a manufacturing facility responsible for different stages of product production, such as assembly, finishing, or quality control.

Machine-Hours

This measure indicates the collective operational duration of machinery used in manufacturing or production processes over a specified timeframe.

Manufacturing Overhead

All indirect costs associated with manufacturing, excluding direct materials and direct labor, such as utilities, maintenance, and factory supplies.