Gant Co. manufactures a product with a standard direct labor cost of two hours at $24.00 per hour. During July, 2,000 units were produced using 4,200 hours at $24.40 per hour. The labor price variance was
A) $1,680 U.
B) $6,480 U.
C) $6,480 F.
D) $4,800 U.

Question

Quizplus · Accepted Answer

The labor price variance is calculated as (Actual Rate - Standard Rate) x Actual Hours. Here, it is ($24.40 - $24.00) x 4,200 = $1,680 Unfavorable (U).

Gant Co Manufactures a Product with a Standard Direct Labor Cost