A job was budgeted to require 3 hours of labor per unit at $11.00 per hour.The job consisted of 8,000 units and was completed in 22,000 hours at a total labor cost of $269,500.What is the total labor cost variance?
A)$2,000 unfavorable.
B)$3,000 unfavorable.
C)$5,500 unfavorable.
D)$8,000 unfavorable.
E)$9,000 unfavorable.

Question

Quizplus · Accepted Answer

The budgeted cost for 8,000 units would have been:

8,000 units × 3 hours per unit × $11.00 per hour = $264,000

The actual cost was $269,500, so the labor cost variance is:

$264,000 (budgeted cost) - $269,500 (actual cost) = $5,500 unfavorable.

Therefore, the correct answer is C, $5,500 unfavorable.

A Job Was Budgeted to Require 3 Hours of Labor