The standard costs and actual costs for direct materials,direct labor,and factory overhead for the manufacture of 2,500 units of product are as follows:
A)$2,000 favorable.
B)$2,500 favorable.
C)$2,500 unfavorable.
D)$2,000 unfavorable.

Question

Quizplus · Accepted Answer

To find the total standard and actual costs, we add up the costs for direct materials, direct labor, and factory overhead. 
Total standard cost = ($5.00 direct materials/unit x 2,500 units) + ($8.00 direct labor/unit x 2,500 units) + ($2.00 factory overhead/unit x 2,500 units) = $37,500 
Total actual cost = ($5.50 direct materials/unit x 2,500 units) + ($8.50 direct labor/unit x 2,500 units) + ($2.50 factory overhead/unit x 2,500 units) = $46,250 
The difference between total standard cost and total actual cost is an unfavorable variance. 
Unfavorable variance = total actual cost - total standard cost 
= $46,250 - $37,500 
= $8,750 
Therefore, the actual costs were $8,750 more than the standard costs, which is Option D.

The Standard Costs and Actual Costs for Direct Materials,direct Labor,and