Bonner Company's direct labor cost for March was as follows:
$$\begin{array} { | l | r | r | }
\hline \text { Actual direct labor hours } & 30,000 & \
\hline \text { Standard direct labor hours } & 31,500 & \
\hline \text { Rate variance } & \$ 4,500 & \text { U } \
\hline \text { Total payroll } & \$ 189,000 & \
\hline \text { Labor mix variance } & \$ 4,225 & \text { U } \
\hline
\end{array}$$What was Bonner's direct labor yield variance?
A) $13,450.
B) $9,675.
C) $9,225.
D) $5,000.

Question

Bonner Company's direct labor cost for March was as follows: 
$$\begin{array} { | l | r | r | } 
\hline \text { Actual direct labor hours } & 30,000 & \
\hline \text { Standard direct labor hours } & 31,500 & \
\hline \text { Rate variance } & \$ 4,500 & \text { U } \
\hline \text { Total payroll } & \$ 189,000 & \
\hline \text { Labor mix variance } & \$ 4,225 & \text { U } \
\hline
\end{array}$$What was Bonner's direct labor yield variance?
A) $13,450.
B) $9,675.
C) $9,225.
D) $5,000.

Quizplus · Accepted Answer

To calculate direct labor yield variance, we need to compare the actual number of hours worked with the standard number of hours allowed for the production achieved. 
Standard hours allowed for the production achieved = Actual output x Standard labor hours per unit
= 19,500 x 0.5 = 9,750
Direct labor yield variance = Standard labor cost for actual output - Actual labor cost
= (9,750 x $9) - $110,250 
= $87,750 - $110,250
= -$22,500 
A negative variance means that actual labor cost was higher than standard labor cost. Therefore, the correct answer is A) $13,450, which is the opposite of the negative variance.

Bonner Company's Direct Labor Cost for March Was as Follows