A Company Had a $22,000 Favorable Direct Labor Efficiency Variance

question 34

Multiple Choice

A company had a $22,000 favorable direct labor efficiency variance during a time period when the standard rate per direct labor hour was $22 and the actual rate per direct labor hour was $21.If the standard direct labor hours allowed for production were 5,000 what is the amount of actual direct labor cost during this period?

• A) $84,000
• B) $88,000
• C) $100,000
• D) $105,000
• E) $110,000

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Definitions:

Hedge

An investment made to reduce the risk of adverse price movements in an asset, typically involving taking an offsetting position in a related security.

Spot Rate

The current price at which a particular currency can be bought or sold for immediate delivery.

Adjustment

An entry made in the accounts to correct a mistake or account for a transaction not reflected in the current financial statements.

Bonds

Bonds are debt securities issued by entities such as corporations or governments to raise funds, promising to repay the borrowed money at a specified interest rate over a set period.