The Clamen Company makes table lamps, for which the following standards have been developed:
During October, production of 100 lamps was expected, but 110 lamps were actually completed.
Direct materials purchased and used were 2,100 pounds at an actual price of $2.20 per pound.
Direct labour cost for the month was $5,310, and the actual pay per hour was $9.00.
-The direct-labour usage variance for the month of October is
A) $560 favourable.
B) $560 unfavourable.
C) $630 favourable.
D) $630 unfavourable.

Question

The Clamen Company makes table lamps, for which the following standards have been developed:
  During October, production of 100 lamps was expected, but 110 lamps were actually completed.
Direct materials purchased and used were 2,100 pounds at an actual price of $2.20 per pound.
Direct labour cost for the month was $5,310, and the actual pay per hour was $9.00.
-The direct-labour usage variance for the month of October is
A) $560 favourable. 
B) $560 unfavourable. 
C) $630 favourable. 
D) $630 unfavourable.

Quizplus · Accepted Answer

The direct-labour usage variance is favourable when the actual hours worked are less than the standard hours allowed. In this case, the actual hours worked were 1,000 hours, and the standard hours allowed were 1,060 hours. Therefore, the direct-labour usage variance is favourable by 60 hours. The amount of the variance is 60 hours x $9 per hour = $560.

The Clamen Company Makes Table Lamps, for Which the Following