Question
A company uses the following standard costs to produce a single unit of output. Direct materials 6 pounds at $1.00 per pound=$6.00 Direct labor 0.4
A company uses the following standard costs to produce a single unit of output.
Direct materials 6 pounds at $1.00 per pound=$6.00
Direct labor 0.4 hour at $8.00 per hour=$3.20
Manufacturing overhead 0.4 hour at $4.60 per hour=$1.84
During the latest month, the company purchased and used 57,000 pounds of direct materials at a price of $1.30 per pound to produce 10,000 units of output. Direct labor costs for the month totaled $28,500 based on 3,750 direct labor hours worked. Variable manufacturing overhead costs incurred totaled $15,400 and fixed manufacturing overhead incurred was $16,000. Based on this information, the total direct labor cost variance for the month was:
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