Wild West Inc.produces a product requiring 3 direct labour hours at $20.00 per hour.During January, 2,000 products are produced using 6,300 direct labour hours.Wild West's actual payroll during January was $122,850.What is the labour quantity variance?
A)$2,850 U
B)$6,000 F
C)$3,150 F
D)$6,000 U

Question

Quizplus · Accepted Answer

The labor quantity variance is calculated as (Actual Hours - Standard Hours) x Standard Rate. Standard Hours for 2,000 products is 6,000 hours (2,000 x 3). The variance is (6,300 - 6,000) x $20 = $6,000 U.