Sanchez Company's output for the current period was assigned a $400,000 standard direct labor cost. The direct labor variances included a $10,000 unfavorable direct labor rate variance and a $4,000 favorable direct labor efficiency variance. What is the actual total direct labor cost for the current period?
A) $394,000.
B) $414,000.
C) $406,000.
D) $386,000.
E) $410,000.

Question

Quizplus · Accepted Answer

Total labor cost = Standard labor cost + Labor rate variance - Labor efficiency variance
Total labor cost = $400,000 + $10,000 (unfavorable) - $4,000 (favorable)
Total labor cost = $406,000

Sanchez Company's Output for the Current Period Was Assigned a $400,000