Assembly line workers at Thompson Manufacturing worked a total of 8,800 direct labor hours to produce 36,000
A)$2,000 favorable
B)$2,000 unfavorable
C)$2,100 favorable
D)$2,100 unfavorable

Question

Quizplus · Accepted Answer

The variance is calculated as (Standard hours - Actual hours) x Standard rate. If the actual hours are less than the standard hours, it is favorable. Here, the standard hours for 36,000 units are 36,000/4 = 9,000 hours. The actual hours are 8,800, so the variance is (9,000 - 8,800) x $20 = $2,000 favorable.

Assembly Line Workers at Thompson Manufacturing Worked a Total of 8,800