A job was budgeted to require 3 hours of labor per unit at $8.00 per hour.The job consisted of 8,000 units and was completed in 22,000 hours at a total labor cost of $198,000.What is the total labor cost variance?
A)$2,000 unfavorable.
B)$3,000 unfavorable.
C)$6,000 unfavorable.
D)$8,000 unfavorable.
E)$9,000 unfavorablE.

Question

Quizplus · Accepted Answer

The standard labor cost for the job would be:
3 hours x $8 = $24 per unit
The total standard labor cost would be:
$24 x 8,000 units = $192,000

The actual labor cost for the job was $198,000, which is $6,000 over the standard labor cost. Therefore, the labor cost variance is unfavorable, and the answer is (C) $6,000 unfavorable.

A Job Was Budgeted to Require 3 Hours of Labor