The Following Data Relate to Direct Labor Costs for the Current

question 160

Multiple Choice

The following data relate to direct labor costs for the current period of Executive Inc.: $\begin{array}{lrr} \text {6,000 hours at \( \$12.00 \) } & \text { Standard costs } \\ \text {7,500 hours at \( \$ 11.60 \) } & \text { Actual costs } \\\end{array}$

Refer to the information provided for Executive Inc. What is the direct labor time variance?

• A) $17,400 favorable
• B) $17,400 unfavorable
• C) $18,000 favorable
• D) $18,000 unfavorable

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Definitions:

Salvage Value

The projected remaining worth of an asset after its lifespan has ended.

Net Operating Income

The profit a company makes from its core operations, excluding expenses and revenues from non-operating activities.

Payback Period

The length of time required to recover the original investment in a project or asset, based on its expected cash flows.

Required Rate

The minimum return that investors expect or the company specifies for an investment, project, or loan.