Using the Labor Time Standard of 0 A) $4,500 (U)
B) $4,500 (F)
C) $3,960 (F)
D)

question 10

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 rate variance. $\begin{array}{ll}\text { Direct labor hours used } & 4,950 \text { hours } \\\text { Total cost of direct labor } & \$ 53,460 \\\text { Number of good units prochuced } & 9,000 \text { units }\end{array}$

• A) $4,500 (U)
• B) $4,500 (F)
• C) $3,960 (F)
• D) $3,960 (U)

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Definitions:

Contribution Margin

The difference between the sales revenue of a product and its variable costs, used to cover fixed costs and generate profit.

Absorption Costing

A costing technique that incorporates all costs associated with production, including both fixed and variable expenses, into the product's price.

Income Increase

A rise in the amount of money earned from various sources, including work, investments, or business operations.

Variable Costing

A costing method that includes only variable costs—costs that change with production levels—in the calculation of product costs.