Super Company produces 2,500 units.Each unit was expected to require 2 labor hours at a cost of $10 per hour.Total labor cost was $55,250 for 4,750 hours worked.Direct labor is measured in hours._____ is the total flexible-budget variance for direct labor.
A)$5,250 favorable
B)$5,250 unfavorable
C)$7,500 favorable
D)None of these answers is correct

Question

Quizplus · Accepted Answer

The flexible budget for 2,500 units would require 2 hours per unit, for a total of 5,000 hours (2,500 units x 2 hours per unit). At a rate of $10 per hour, the flexible budget for direct labor would be $50,000 (5,000 hours x $10 per hour). 
The actual cost for direct labor was $55,250, which is $5,250 more than the flexible budget. Therefore, the total flexible-budget variance for direct labor is $5,250 unfavorable.

Super Company Produces 2,500 Units