Kokko Company makes a product that is expected to require 2 hours of labor per unit of product.The standard cost of labor is $6.00.Kokko actually used 2.1 hours of labor per unit of product.The actual cost of labor was $6.25 per hour.Kokko made 1,100 units of product during the period.Based on this information alone,the labor usage variance is:
A) $190 favorable.
B) $660 unfavorable.
C) $600 favorable.
D) $660 favorable.

Question

Quizplus · Accepted Answer

Labor usage variance = (Actual hours - Standard hours) x Standard rate
= (2.1 - 2) x $6
= $0.6 unfavorable per unit
Total labor usage variance = $0.6 x 1,100 units
= $660 unfavorable.

Kokko Company Makes a Product That Is Expected to Require