Use the Following Data to Find the Total Direct Labor

question 31

Multiple Choice

Use the following data to find the total direct labor cost variance.
$\begin{array}{ll}\text { Direct labor standard (4 hrs. } @ & \$ 28 \text { per unit } \\\$ 7 / \mathrm{hr} \text {.) } & \\\text { Actual hours worked per unit } & 3.5 \text { hours } \\\text { Actual units produced } & 3,500 \text { units } \\\text { Actual rate per hour } & \$ 7.50\end{array}$

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

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Definitions:

Land Purchased

The act of buying land, which is considered a fixed asset and is recorded on the balance sheet at cost, without depreciation.

Intangible Asset

An asset that lacks physical substance, such as patents, trademarks, and goodwill, and provides economic benefits to its owner.

Physical Existence

The actual, tangible presence of items or assets, often verified during inventory or asset audits.

Depreciation Expense

The allocation of the cost of an asset over its useful life, reflecting the usage and wear and tear of the asset.