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 labor quantity variance is
A) $770 U.
B) $770 F.
C) $1800 F.
D) $1930 F.

Question

Quizplus · Accepted Answer

Standard labor hours per unit = 2
Standard rate per hour = $12

Standard cost per unit = 2 x $12 = $24

Actual hours of labor = 3850
Actual cost of labor = $46970

Actual cost per unit = $46970 / 2000 = $23.485

Labor Quantity Variance = (Actual Hours - Standard Hours) x Standard Rate

= (3850 - 4000) x $12

= $1800 F

Dillon Has a Standard of 2 Hours of Labor Per