Fifteen Minutes of Direct Labour Is Needed to Produce One

question 57

Multiple Choice

Fifteen minutes of direct labour is needed to produce one unit of product and direct labour is paid $20 per hour. Budgeted output for the period is estimated to be 14 000 units. Actual output for the period turns out to be 14 600 units and actual labour costs are $77 900. What budgeted direct labour amount should actual direct labour costs be compared to in order to calculate a valid variance?

• A) $70 000
• B) $73 000
• C) $56 000
• D) $58 400

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