Question
A company uses the following standard costs to produce a single unit of output. Direct materials 6 pounds at $0.90 per pound = $ 5.40
A company uses the following standard costs to produce a single unit of output.
Direct materials | 6 pounds at $0.90 per pound | = | $ | 5.40 | |
Direct labor | 0.5 hour at $12.00 per hour | = | $ | 6.00 | |
Manufacturing overhead | 0.5 hour at $4.80 per hour | = | $ | 2.40 | |
During the latest month, the company purchased and used 58,000 pounds of direct materials at a price of $1.00 per pound to produce 10,000 units of output. Direct labor costs for the month totaled $56,350 based on 4,900 direct labor hours worked. Variable manufacturing overhead costs incurred totaled $15,000 and fixed manufacturing overhead incurred was $10,400. Based on this information, the total direct labor cost variance for the month was:
Multiple Choice
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$3,650 favorable
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$2,450 favorable
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$1,200 unfavorable
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$1,200 favorable
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$2,450 unfavorable
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