The direct labor standards for a particular product are 4 hours of direct labor at $12.00 per direct labor-hour = $48.00. During October, 3,350 units of this product were made, which was 150 units less than budgeted. The labor cost incurred was $159,786 and 13,450 direct labor-hours were worked. The direct labor variances for the month were:
A) Choice A
B) Choice B
C) Choice C
D) Choice D

Question

The direct labor standards for a particular product are 4 hours of direct labor at $12.00 per direct labor-hour = $48.00. During October, 3,350 units of this product were made, which was 150 units less than budgeted. The labor cost incurred was $159,786 and 13,450 direct labor-hours were worked. The direct labor variances for the month were: 
A) Choice A 
B) Choice B 
C) Choice C 
D) Choice D

Quizplus · Accepted Answer

Labor rate variance = (AH × AR) - (AH × SR)
= $159,786 - (13,450 direct labor-hours × $12 per direct labor-hour)
= $159,786 - ($161,400)
= $1,614 F
Variable overhead efficiency variance = (AH - SH) × SR
= [13,450 direct labor-hours - (3,350 units × 4 direct labor-hours per unit)] × $12 per direct labor-hour
= [13,450 direct labor-hours - (13,400 direct labor-hours)] × $12 per direct labor-hour
= [50 direct labor-hours] × $12 per direct labor-hour
= $600 U

The Direct Labor Standards for a Particular Product Are 4