Dillon has a standard of 2 hours of labor per unit at $12 per hour. In producing 2000 units Dillon used 3850 hours of labor at a total cost of $46970. Dillon's total labor variance is
A) $1030 U.
B) $800 U.
C) $1030 F.
D) $1930 F.

Question

Quizplus · Accepted Answer

First, calculate the standard labor cost per unit:

2 hours/unit x $12/hour = $24/unit

Then, calculate the standard labor cost for the production of 2000 units:

$24/unit x 2000 units = $48,000

Next, calculate the actual labor cost for the production of 2000 units:

$46970

Finally, calculate the labor variance:

Actual labor cost - Standard labor cost
= $46970 - $48000
= $1030 F

Dillon Has a Standard of 2 Hours of Labor Per