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A company uses the following standard costs to produce a single unit of output. Direct materials 7 pounds at $1.10 per pound = $ 7.70
A company uses the following standard costs to produce a single unit of output.
Direct materials | 7 pounds at $1.10 per pound | = | $ | 7.70 | |
Direct labor | 0.6 hour at $8.00 per hour | = | $ | 4.80 | |
Manufacturing overhead | 0.6 hour at $4.60 per hour | = | $ | 2.76 | |
During the latest month, the company purchased and used 68,000 pounds of direct materials at a price of $1.20 per pound to produce 10,000 units of output. Direct labor costs for the month totaled $45,199 based on 5,870 direct labor hours worked. Variable manufacturing overhead costs incurred totaled $23,600 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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