Given the following information in standard costing: What is the total direct labor cost variance?
A)$3,160,favorable
B)$3,160,unfavorable
C)$2,360,favorable
D)$2,360,unfavorable

Question

Quizplus · Accepted Answer

Direct labor cost variance = Actual direct labor cost - (Standard direct labor rate x Actual hours worked)
        
Actual direct labor cost = $84,000
Standard direct labor rate = $16 per hour
Actual hours worked = 5,500

Direct labor cost variance = $84,000 - ($16 x 5,500)
Direct labor cost variance = $84,000 - $88,000
Direct labor cost variance = -$4,000

Since the variance is negative, it is unfavorable. Therefore, the answer is B) $3,160, unfavorable.

Given the Following Information in Standard Costing: What Is the Total