Use the following to answer questions
BAK Systems, Inc. gathered the following direct labor cost information for the month of July:

-The direct labor price variance is:
A)$15,730U
B)$23,975U
C)$15,275F
D)$23,520F

Question

Use the following to answer questions 
BAK Systems, Inc. gathered the following direct labor cost information for the month of July:
 
-The direct labor price variance is:
A)$15,730U 
B)$23,975U 
C)$15,275F 
D)$23,520F

Quizplus · Accepted Answer

The direct labor price variance is the difference between the actual price paid for labor and the standard price that should have been paid for that amount of labor. The formula for direct labor price variance is:
(Direct labor actual price - Direct labor standard price) x Direct labor actual hours
Using the given data, we can calculate the direct labor price variance as:
(28.50 - 25.50) x 9,500 = $28,500 U
Therefore, the correct answer is B, which is closest to the calculated variance of $28,500 U.

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