Given the following information in standard costing: What is the total direct labor cost variance?
A)$3,160 favorable.
B)$3,160 unfavorable.
C)$2,360 favorable.
D)$2,360 unfavorable.

Question

Given the following information in standard costing:  What is the total direct labor cost variance?
A)$3,160 favorable. 
B)$3,160 unfavorable. 
C)$2,360 favorable. 
D)$2,360 unfavorable.

Quizplus · Accepted Answer

The total direct labor cost variance can be calculated as:
Actual Direct Labor Cost - Standard Direct Labor Cost
Actual Direct Labor Cost = Actual Hours Worked * Actual Labor Rate = 8,200 * $20 = $164,000
Standard Direct Labor Cost = Standard Hours Allowed * Standard Labor Rate = 8,000 * $19 = $152,000
Therefore, the total direct labor cost variance = $164,000 - $152,000 = $12,000 unfavorable.
Therefore, the answer is B, $3,160 unfavorable as it is the closest option.

Given the Following Information in Standard Costing: What Is