If a company incurs direct labor cost of $82000 when the standard cost is $84000 it will
A) debit Labor Price Variance for $2000.
B) credit Labor Price Variance for $2000.
C) debit Labor Quantity Variance for $2000.
D) credit Labor Quantity Variance for $2000.

Question

Quizplus · Accepted Answer

The company spent $2,000 less on labor than the standard cost, indicating a favorable variance. Therefore, the Labor Price Variance account is credited to reflect the cost savings.

If a Company Incurs Direct Labor Cost of $82000 When